-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, oqAtU/lWnVp5zl+azqhJEq2ey8rN9TTpD4wMMtpd57JSh66OUPNz9VCWSqAVqqC/ EPP32dSwFHHonDYBNxBVqA== 0000049029-94-000009.txt : 19940427 0000049029-94-000009.hdr.sgml : 19940427 ACCESSION NUMBER: 0000049029-94-000009 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 19940128 FILED AS OF DATE: 19940426 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HUGHES SUPPLY INC CENTRAL INDEX KEY: 0000049029 STANDARD INDUSTRIAL CLASSIFICATION: 5070 IRS NUMBER: 590559446 STATE OF INCORPORATION: FL FISCAL YEAR END: 0125 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08772 FILM NUMBER: 94524405 BUSINESS ADDRESS: STREET 1: 20 N ORANGE AVE, STE 200 STREET 2: P O BOX 2273 CITY: ORLANDO STATE: FL ZIP: 32802-2273 BUSINESS PHONE: 4078414755 10-K 1 FORM 10-K 1/28/94 FORM 10-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal year ended January 28, 1994 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from ________________to________________ Commission File No. 0-5235 HUGHES SUPPLY, INC. (Exact name of registrant specified in its charter) Incorporated in the State I.R.S. EMPLOYER I.D. of Florida Number 59-0559446 Post Office Box 2273, 20 N. Orange Avenue, Suite 200, Orlando, FL 32801 (Address of principal executive office) Registrant's Telephone Number, including area code: 407/841-4755 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange Title of each class on which registered Common Stock ($1.00 Par Value) New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: Common Stock ($1.00 Par Value) 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 by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] State the aggregate market value of the voting stock held by nonaffiliates of the Registrant: $113,454,184 as of March 25, 1994. Indicate the number of shares outstanding of each of the Registrant's classes of common stock, as of the latest practicable date: 5,114,361 shares of common stock ($1.00 par value) as of March 25, 1994. DOCUMENTS INCORPORATED BY REFERENCE List hereunder the following documents if incorporated by reference and the Part of the Form 10-K into which the document is incorporated: Part I - Annual Report to shareholders for fiscal year ended January 28, 1994 (designated portions). Part II - Annual Report to shareholders for fiscal year ended January 28, 1994 (designated portions). Part III- Proxy Statement dated April 18, 1994 (designated portions). Part IV - Annual Report to shareholders for fiscal year ended January 28, 1994 (designated portions). PART I ITEM 1. BUSINESS (a) General Development of Business Hughes Supply, Inc. (the "Registrant") was founded as a general partnership in Orlando, Florida in 1928. The Registrant was incorporated as a Florida corporation in 1947. As used throughout this Report, the term "Registrant" shall be deemed to mean the Registrant and its subsidiaries, except where the context otherwise indicates. The Registrant is primarily engaged in the wholesale distribution of a broad range of materials, equipment and supplies to the construction industry. Major product lines distributed by the Registrant include electrical, plumbing, electric utility equipment, building materials, water and sewer equipment, air conditioning and heating equipment and pipe, valves and fittings. The Registrant distributes its product lines through 140 wholesale sales outlets located in Florida and 9 other states throughout the Southeast. The Registrant operates 53 sales outlets in Florida, 20 sales outlets in Georgia, 8 sales outlets in Alabama, and 1 sales outlet in South Carolina under the name of Hughes Supply, Inc. The subsidiaries of the Registrant operate a total of 58 sales outlets in Florida, Georgia, North Carolina, South Carolina, Mississippi, Tennessee, Kentucky, Maryland and Virginia. In addition to its wholesale sales outlets, the Registrant and certain of its subsidiaries operate 7 retail showrooms which offer, principally to retail customers, a variety of lighting or plumbing fixtures and related accessories. A current listing of the locations of the wholesale sales outlets and retail showrooms of the Registrant and its subsidiaries is set forth as Exhibit 99.1 to this report. The principal executive offices of the Registrant are located at 20 North Orange Avenue, Suite 200, Orlando, Florida 32801 (telephone 407-841-4755). (b) Financial Information About Industry Segments The Registrant does not engage in significant operations in more than one industry segment as defined in Statement of Financial Standards No. 14. (c) Narrative Description of Business Products Distributed The products sold by the Registrant may be classified into the following seven major product lines: Electrical fixtures and supplies - 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, other special use fixtures and appliances. Plumbing, water heaters, fixtures and supplies - plumbing fixtures and related fittings, residential, commercial and industrial water heaters, pumps, irrigation equipment and plumbing accessories and supplies. Building materials - reinforcing wire, reinforcing bars, plyform, expansion joints, lumber, doors and related hardware, masonry and other building materials, home appliances, carpenters', electricians' and plumbers' tools and other tools and equipment for the mechanical and building trades. Electric utility supplies - transformers, conductor cable, insulators, prestressed concrete transmission and distribution poles, and other electric utility supplies and related hardware, accessories and tools. 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 and supplies. Water and sewer supplies - water works and industrial supplies, including large diameter plastic (PVC) and cast iron pipe, fire hydrants, water meters, valves and related hardware and accessories. Pipe, valves and fittings - mechanical and weld pipe, valves and related fittings, fire protection systems and supplies, high performance valves and specialty pipe. There has been no significant change in the nature of the products sold by the Registrant during the last five years. Marketing In recent years the Registrant's marketing plan has led to the expansion of the geographic markets served by the Registrant, as well as the expansion of its product lines. The following table illustrates, by company, the expansion achieved through acquisitions over the last five fiscal years.
Method of Date of Number of State(s) of Company's Major Acquired Company Acquisition Acquisition Locations Operation Product Lines - -------------------- ------------- -------------- --------- ----------- --------------------------------- Hughes-Bradley 21% equity November, 1987 1 Georgia Heating and air conditioning Supply, Inc. (1) purchase equipment and supplies, plumbing fixtures and supplies Purchase June, 1989 4 Alabama electrical fixtures and completed supplies Atlanta branches (2) Purchase March, 1989 2 (3) Georgia Electrical fixtures and supplies Tri Plumbing Purchase August, 1989 2 (5) Maryland Plumbing fixtures and supplies Supply, Inc. (4) Virginia branch (6) Purchase June, 1993 1 Virginia Plumbing fixtures and supplies Georgia and Florida Purchase June, 1993 3 Georgia Electrical and electric branches (7) 1 Florida utility equipment and supplies Electrical Pooling June, 1993 1 Georgia Electrical fixtures and supplies Distributors, Inc. Alabama Water Works Purchase July, 1993 2 Alabama Water and sewer equipment Supply, Inc. and supplies Florida branches (8) Purchase December, 1993 2 Florida Building materials Swaim Supply Pooling January, 1994 6 North Carolina Plumbing fixtures and supplies, Company, Inc. heating and air conditioning 2 Virginia equipment and supplies
(1) Merged into the Registrant on August 31, 1990. (2) Facilities acquired in purchase of assets from Summers Electric Company. (3) Sales outlets closed during fiscal year ended January 25, 1991. (4) Merged into USCO Incorporated on December 31, 1992. (5) One sales outlet closed during fiscal year ended January 29, 1993. (6) Facility in Falls Church, Virginia aquired in purchase of assets from Capitol Hydronic Supply Company, Inc. Sales outlet relocated to Arlington, Virginia. (7) Facilities acquired in Macon, Georgia and Tallahassee, Florida in purchase of assets from Causey Electrical Supply Company, Causey Utility Supply Co. and Macon Lighting Center, Inc. (8) Facilities acquired in purchase of assets from Hausman Corporation. In addition to expansion through acquisition, the Registrant has increased its geographic market area by opening new sales outlets in Jacksonville, Kissimmee, Lady Lake, Ft. Myers, Tampa, West Palm Beach, Naples, and Auburndale, Florida, in Tifton, Hartsfield, Alpharetta, and LaGrange, Georgia, in Hickory, Wilmington and Greensboro, North Carolina, in Dothan and Mobile, Alabama, in Anderson, South Carolina and in Memphis, Tennessee during the past five years. During the past year, the Registrant also discontinued the operation of certain of its sales outlets in Hickory, North Carolina, Warner Robins, Georgia and Winter Park, Florida, which were operating unprofitably in areas which could be served by others of its sales outlets. Each of the Registrant's sales outlets handles one or more of the Registrant's product lines. Sales are made primarily to contractors, electric utilities, municipalities and industrial accounts. The Registrant employs approximately 300 outside sales representatives who call on customers and who also work with architects, engineers and manufacturers' representatives when major construction projects are involved. For each outside sales representative, there are generally two inside account executives who expedite orders, deliveries, quotations, and requests for pricing. Most orders are taken by telephone, and materials are delivered by Registrant-owned trucks to the customer's office or job site. The Registrant's wholesale and retail outlets are sales and distribution points for the products sold by the Registrant. Each sales outlet operates as a separate profit center with its own sales force. Each is managed by its own manager, who is directly responsible for customer relations, the hiring and promotion of personnel, purchasing, sales, the maintenance of adequate inventory levels, and cost control for the particular sales outlet. Day to day operations of the sales outlets are the responsibility of the respective managers, but major decisions affecting Registrant policy, facilities or capital outlay are reviewed by the Registrant's executive officers. Purchasing agents generally make use of a computerized perpetual inventory system to monitor stock levels, while central distribution centers in Orlando, Florida, College Park, Georgia and Monroe, North Carolina provide purchasing assistance. The Hughes Supply, Inc. general accounting, customer billing, inventory, and accounts payable systems are processed at the Registrant's central computer facility in Orlando, Florida, with such processing generally handled by discrete systems at the subsidiaries. Over 45,000 wholesale customers are presently served by the Registrant, and no single customer accounts for more than 2% 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 out of inventory on hand. Some items are manufactured to customer specifications and require special ordering. Additionally, some large volume orders are shipped directly to the customer from the manufacturer. Sources of Supply All products sold by the Registrant are purchased from other manufacturers and suppliers. The Registrant regularly purchases from over 6,000 outside manufacturers and suppliers, no single one of which accounted for more than 6% of the Company's total purchases during the fiscal year ended January 28, 1994. Inventories The Registrant is a wholesale distributor of construction materials, which maintains significant inventories to meet rapid delivery requirements and to assure itself of a continuous allotment of goods from suppliers. As of January 28, 1994, inventories constituted approximately 36% of the Registrant's total assets. Competition There is strong competition throughout the marketing areas served by the Registrant in each product line the Registrant distributes. 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 and contractor's tools. Management believes that the Registrant, on the basis of its total sales, is the largest wholesale distributor of its range of products in the Southeast. The principal competitive factors in the Registrant's business are availability of material, technical product knowledge as to application and usage, advisory and other service capabilities and pricing of products. Compliance With Environmental Protection Provisions The Registrant accrued approximately $675,000 as an operating expense in the fiscal year ended January 31, 1992, for estimated future costs of removing underground fuel storage tanks and environmental clean-up costs to comply with federal, state and local laws and regulations for the protection of the environment. The Registrant does not expect any additional material expenses in future years associated with fuel storage tanks. Information with respect to this matter is also included in Management's Discussion and Analysis of Financial Condition and Results of Operations on pages 24 and 25 of the Annual Report to shareholders for the fiscal year ended January 28, 1994, a copy of which is filed as an exhibit to this report and the cited portion of which is incorporated herein by reference. Employees The Registrant had a total of approximately 2,350 employees as of January 28, 1994, consisting of approximately 20 executives, 450 managers, 750 sales personnel and 1,130 other employees, including truck drivers, warehouse personnel, office and clerical workers. The Registrant's work force has increased by approximately 13% compared to the prior year in response to increased sales volume as well as the result of business acquisitions during the current year. (d) Financial Information about Foreign and Domestic Operations and Export Sales The Registrant does not engage in material operations or derive a material portion of its sales or revenues from customers in foreign countries. ITEM 2. PROPERTIES The Registrant leases approximately 21,000 square feet of an office building in Orlando, Florida for its headquarters. In addition, the Registrant owns or leases 54 sales outlets in Florida, 22 sales outlets in Georgia, 20 sales outlets in North Carolina, 10 sales outlets in South Carolina, 11 sales outlets in Mississippi, 9 sales outlets in Tennessee, 8 sales outlets in Alabama, 2 sales outlets in Kentucky, 3 sales outlets in Virginia and 1 sales outlet in Maryland. The typical sales outlet consists of a combined office and warehouse facility ranging in size from 3,000 to 40,000 square feet, with a paved parking and storage area. The Registrant also operates a computer center, three central distribution warehouses, and a garage and trucking terminal. The Registrant's subsidiary corporate office locations are set forth on page 28 of the Annual Report to shareholders for the fiscal year ended January 28, 1994, a copy of which is filed as an exhibit to this report and the cited portion of which is incorporated herein by reference. Additional information regarding owned and leased properties of the Registrant is set forth as Exhibit 99.1 to this report and in Note 6 of the Notes to Consolidated Financial Statements on pages 21 and 22 of the Annual Report to shareholders for the fiscal year ended January 28, 1994, a copy of which is filed as an exhibit to this report and the cited portion of which is incorporated herein by reference. ITEM 3. LEGAL PROCEEDINGS There are no material pending legal proceedings to which the Registrant or its subsidiaries is a party or of which the property of either the Registrant or its subsidiaries is the subject which are required to be reported in response to this item. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matter was submitted to a vote of the Registrant's security holders during the fourth quarter of the fiscal year ended January 28, 1994. PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Information with respect to the principal market for the Registrant's common stock, stock prices and dividend information is set forth under the captions "Shareholder Information" and "Market Price and Dividend Data" on page 28 and page 3, respectively, of the Annual Report to shareholders for the fiscal year ended January 28, 1994, a copy of which is filed as an exhibit to this report and the cited portion of which is incorporated herein by reference. ITEM 6. SELECTED FINANCIAL DATA "Selected Financial Data" is set forth on pages 26 and 27 of the Registrant's Annual Report to shareholders for the fiscal year ended January 28, 1994, a copy of which is filed as an exhibit to this report and the cited portion of which is incorporated herein by reference. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS "Management's Discussion and Analysis of Financial Condition and Results of Operations" is set forth on pages 24 and 25 of the Registrant's Annual Report to shareholders for the fiscal year ended January 28, 1994, a copy of which is filed as an exhibit to this report and the cited portion of which is incorporated herein by reference. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (a) Financial Statements The financial statements filed with this report are set forth in the "Index to Consolidated Financial Statements and Schedules" following Part IV hereof. (b) Selected Quarterly Data "Selected Quarterly Financial Data" is set forth on page 3 of the Registrant's Annual Report to shareholders for the fiscal year ended January 28, 1994, a copy of which is filed as an exhibit to this report and the cited portion of which is incorporated herein by reference. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE The Registrant has not had any change in, or disagreement with its accountants or reportable event which is required to be reported in response to this item. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT (a) Identification of Directors Information with respect to Directors of the Registrant is set forth under "Directors and Nominees for Election as Directors of the Company" and "Family Relationships Between Certain Directors" on pages 2 through 5 and page 9, respectively, of the Registrant's Proxy Statement dated April 18, 1994, which has been filed with the Commission by the Registrant under Regulation 14A and the cited portion of which is incorporated herein by reference. (b) Identification of Executive Officers Information with respect to Executive Officers of the Registrant is set forth under "Executive Officers" on page 11 and, with respect to Executive Officers who are also Directors is also set forth under the captions referred to in paragraph (a) above of this Item 10 on pages 2 through 5 and page 9 of the Registrant's Proxy Statement dated April 18, 1994, which has been filed with the Commission by the Registrant under Regulation 14A and the cited portions of which are incorporated herein by reference. (c) Compliance with Section 16(a) of the Securities Exchange Act of 1934 The information required by Item 405 of Regulation S-K is furnished under the caption "Compliance with Section 16(a) of the Securities Exchange Act of 1934" on page 22 of the Registrant's Proxy Statement dated April 18, 1994, which has been filed with the Commission under Regulation 14A and the cited portion of which is incorporated herein by reference. ITEM 11. EXECUTIVE COMPENSATION Information with respect to executive compensation is set forth under the caption "Executive Compensation and Other Information" on pages 11 through 18 of the Registrant's Proxy Statement dated April 18, 1994. Except as hereinafter set forth, such information is deemed to have been filed with the Commission as a part of such Proxy Statement and is incorporated by reference herein. Notwithstanding anything to the contrary set forth in the Company's previous filings under the Securities Act of 1933, as amended (the "33 Act"), or the Securities Exchange Act of 1934, as amended (the "34 Act"), that might incorporate future filings including the Proxy Statement or this Report on Form 10-K, the "Compensation Committee Report on Executive Compensation" on pages 12 through 14 and the section captioned "Shareholder Return" on page 19 of the Proxy Statement are specifically excluded from the portions of the Proxy Statement incorporated by reference herein or into any other filing under the 33 Act or the 34 Act. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Information as of March 25, 1994, or as of December 31, 1993, with respect to persons known to management of the Registrant to be the beneficial owners of more than 5% of the outstanding common stock of the Registrant and information with respect to the security ownership of management of the Registrant is set forth under the captions "Ownership of Securities by Certain Beneficial Owners" on pages 5 through 7 and "Ownership of Securities by Certain Directors and Officers" on pages 8 and 9 of the Registrant's Proxy Statement dated April 18, 1994, filed with the Commission pursuant to Regulation 14A, and such information is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Information with respect to certain relationships and related transactions is set forth under the caption "Certain Transactions with Management" on pages 20 through 22 of the Registrant's Proxy Statement dated April 18, 1994, which has been filed with the Commission pursuant to Regulation 14A and the cited portion of which is incorporated herein by reference. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a) Financial Statements and Financial Statement Schedules Financial statements and financial statement schedules required to be filed by item 8 of this Form 10-K are listed in a separately designated section submitted below. Exhibits are listed in subparagraph (c) below. (b) Reports on Form 8-K There were no reports on Form 8-K filed during the quarter ended January 28, 1994. (c) Exhibits Filed A substantial number of the exhibits referred to below are indicated as having been previously filed as exhibits to other reports under the Securities and Exchange Act of 1934 or as exhibits to registration statements under the Securities Act of 1933. Such previously filed exhibits are incorporated by reference in this Form 10-K. Exhibits not incorporated by reference herein are filed with this report. (2) Plan of acquisition, reorganization, arrangement, liquidation or succession. Not applicable. (3) Articles of incorporation and by-laws. 3.1 Restated Articles of Incorporation (January 24, 1989), filed as Exhibit 3.1 to Form 10-K for the fiscal year ended January 27, 1989. 3.2 Composite By-Laws, as amended, filed as Exhibit 3.2 to Form 10-K for the fiscal year ended January 27, 1989. (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 4.2 to Form 10-Q for the quarter ended October 31, 1984. 4.2 Trust Indenture dated May 1, 1986 between the Registrant and J. Henry Schroder Bank & Trust Company, as Trustee for the holders of the 7% Convertible Subordinated Debentures, filed as Exhibit 4(b) to Registration No. 33-4714. 4.3 Specimen Copy of Certificate representing 7% Convertible Subordinated Debenture, filed as Exhibit 4(c) to Registration No. 33-4714. 4.4 Resolution Approving and Implementing Shareholder Rights Plan filed as Exhibit 4.4 to Form 8-K dated May 17, 1988. (9) Voting trust agreement. Not applicable. (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. 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. (b) Leases effective March 31, 1988, filed as Exhibit 10.1 (c) to Form 10-K for the fiscal year ended January 27, 1989. Sub-Item Property (1) Clearwater (2) Daytona Beach (3) Fort Pierce (4) Lakeland (5) Lakeland - Lightstyle (6) Leesburg (7) Orlando Electrical Operation (8) Orlando Plumbing Operation (9) Orlando Utility Warehouse (10) St. Petersburg (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. (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. (e) Leases dated March 11, 1992, filed as Exhibit 10.1(e) to Form 10-K for the fiscal year ended January 31, 1992. Sub-Item Property (1) Tallahassee Electrical Operation (2) Gainesville Electrical Operation (3) Valdosta Electrical Operation 10.2 Hughes Supply, Inc. 1988 Stock Option Plan filed as Exhibit A to Prospectus included in Registration No. 33-26468. 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. 10.4 Directors' Stock Option Plan filed as Exhibit A to Prospectus included in Registration No. 33-33701. 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 fiscal year ended January 25, 1991. 10.6 Lease Agreement dated June 30, 1993 between Donald C. Martin and Electrical Distributors, Inc. 10.7 Consulting Agreement dated June 30, 1993 between Hughes Supply, Inc. and Donald C. Martin. (11) Statement re computation of per share earnings. 11.1 Summary schedule of earnings per share calculation. (12) Statement re computation of ratios. Not applicable. (13) Annual report to security holders, Form 10-Q or quarterly report to security holders. 13.1 Information incorporated by reference into Form 10-K from the Annual Report to shareholders for the fiscal year ended January 28, 1994. (16) Letter re change in certifying accountant. Not applicable. (18) Letter re change in accounting principles. Not applicable. (21) Subsidiaries of the Registrant. 21.1 Subsidiaries of the Registrant. (22) Published report regarding matters submitted to vote of Security holders. Not applicable. (23) Consents of experts and counsel. 23.1 Consent of independent accountants. (24) Power of attorney. Not applicable. (27) Financial data schedule. Not applicable. (28) Information from reports furnished to state insurance regulatory authorities. Not applicable. (99) Additional exhibits. 99.1 Location of facilities. (d) Financial Statement Schedules Financial statements and financial statement schedules required by Regulation S-X which are excluded from the annual report to shareholders by Rule 14a-3(b). Not Applicable. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. By: /s/ David H. Hughes David H. Hughes, Chairman of the Board and Chief Executive Officer /s/ J. Stephen Zepf J. Stephen Zepf, Treasurer, Chief Financial Officer, Chief Accounting Officer Date: April 22, 1994 Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. /s/ David H. Hughes /s/ Robert N. Blackford David H. Hughes Robert N. Blackford April 22, 1994 April 22, 1994 (Director) (Director) /s/ Clifford M. Hames /s/ Vincent S. Hughes Clifford M. Hames Vincent S. Hughes April 22, 1994 April 22, 1994 (Director) (Director) /s/ Herman B. McManaway Russell V. Hughes Herman B. McManaway April 22, 1994 April 22, 1994 (Director) (Director) /s/ John B. Ellis /s/ A. Stewart Hall, Jr John B. Ellis A. Stewart Hall, Jr. April 22, 1994 April 22, 1994 (Director) (Director) /s/ Donald C. Martin /s/ John D. Baker, II Donald C. Martin John D. Baker, II April 22, 1994 April 22, 1994 (Director) (Director) HUGHES SUPPLY, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES The following consolidated financial statements of the Registrant and its subsidiaries included in the Annual Report of the Registrant to its shareholders for the year ended January 28, 1994, a copy of which is filed herewith, are incorporated by reference: Annual Report Page Consolidated Statements of Operations for the years ended January 28, 1994, January 29, 1993 and January 31, 1992 14 Consolidated Balance Sheets as of January 28, 1994 and January 29, 1993 15 Consolidated Statements of Shareholders' Equity for the years ended January 28, 1994, January 29, 1993 and January 31, 1992 16 Consolidated Statements of Cash Flows for the years ended January 28, 1994, January 29, 1993 and January 31, 1992 17 Notes to Consolidated Financial Statements 18 Report of Independent Accountants 23 All other financial statements and schedules have been omitted as they are either not applicable, not required or the information is given in the financial statements or related notes. INDEX OF EXHIBITS FILED WITH THIS REPORT 10.6 Lease Agreement dated June 30, 1993 between Donald C. Martin and Electrical Distributors, Inc. 10.7 Consulting Agreement dated June 30, 1993 between Hughes Supply, Inc. and Donald C. Martin. 11.1 Computation of per share earnings. 13.1 Information incorporated by reference into Form 10-K from the Annual Report to shareholders for fiscal year ended January 28, 1994. 21.1 Subsidiaries of the Registrant. 23.1 Consent of Coopers & Lybrand. 99.1 Location of facilities. EX-10 2 EXHIBIT 10.6 LEASE AGREEMENT THIS LEASE AGREEMENT made and entered into as of the 30th day of June, 1993, by and between DONALD C. MARTIN (hereinafter referred to as the "Lessor"), and ELECTRICAL DISTRIBUTORS, INC. (hereinafter referred to as the "Lessee"). W I T N E S S E T H : WHEREAS, Lessor desires to lease certain property to Lessee; and WHEREAS, Lessee desires to lease such property; NOW, THEREFORE, in consideration of the premises and the mutual promises and agreements hereinafter contained, the parties do hereby agree as follows: ARTICLE I PROPERTY. Lessor agrees to lease and demise unto Lessee certain property, known as 5180 Peachtree Road, Atlanta, Georgia 30341, as described on Exhibit "A" hereto (hereinafter referred to as the "Property"). ARTICLE II LEASE TERM. The term of this Lease Agreement shall be for a period of five (5) years commencing on July 1, 1993, and ending on June 30, 1998, both dates inclusive, unless sooner terminated as herein provided. In no event shall there be any renewal of this Lease by operation of law, and if Lessee remains in possession of the Property after the termination of this Lease and without a new lease executed by Lessor and Lessee, but with the acquiescence of Lessor, Lessee shall be deemed to be occupying the Property under a month-to-month periodic tenancy at an amount to be agreed upon by the parties hereto, and in no event less than the then-current Rent as hereinafter provided, and otherwise subject to all the covenants and provisions of this Lease insofar as the same are applicable to a month-to-month periodic tenancy. Lessor and Lessee agree that any such periodic tenancy may be terminated by thirty (30) days prior written notice by either party to this Lease to the other party. If Lessee remains in possession after termination of this Lease without Lessor's acquiescence or consent, Lessee thereupon shall be deemed a tenant-at-sufferance and may be evicted at once without notice. ARTICLE III 3.1 RENT. From July 1, 1993 through and including June 30, 1995, Lessee agrees to pay Lessor without demand, deduction or set- off as rental $3.25 per square foot per year (32,780 square feet x $3.25 = $106,535.00 annually, $8,877.92 monthly), in advance, on the first (1st) day of each calendar month during the Lease Term. From July 1, 1995, through and including June 30, 1998, Lessee agrees to pay Lessor without demand, deduction or set-off as rental $3.75 per square foot per year (32,780 square feet x $3.75 = $122,925.00 annually, $10,243.75 monthly), in advance, on the first (1st) day of each calendar month during the Lease Term. Lessee shall pay to Lessor all rent and all other charges due and owing by Lessee under this Lease without deduction or set-off, in legal tender, and at Lessor's address specified in Section 14.7 or as otherwise directed from time to time by Lessor's notice. 3.2 ADDITIONAL RENT. Lessee shall pay to Lessor in addition to all rent as herein provided, on or before the dates the same shall become due and payable, and as additional rent, all taxes, insurance and general maintenance of the Property, which Lessee assumes or agrees to pay hereunder, together with all interest and penalties that may accrue thereon. In the event of non-payment, Lessor shall have the rights and remedies herein provided for in the case of non-payment of rent or a breach of condition. 3.3 TAXES AND OTHER CHARGES. Lessee shall, without notice or demand, as additional rent, pay and discharge, on or before the last day on which the same may be paid without penalty, all taxes, rates and charges, sanitary assessments, and other governmental impositions and charges of every kind and nature whatsoever, and each and every installment thereof together with all interest and penalties thereon, which shall or may during the Lease Term be levied, assessed or imposed on or become a lien upon or become due or payable out of or for or by reason of the Property or any part thereof, the Lessee's or the Lessor's interest in the Property and the improvements located thereon, or any buildings, appurtenances, or equipment now or hereafter erected or placed thereon or therein or any part thereof, or the sidewalks or streets in front of or adjoining the Property including further any rent tax which may now or hereafter be imposed in addition to or in lieu of real property ad valorem taxes. All taxes levied, assessed or imposed in addition to the foregoing shall be paid by Lessee together with all interest and penalties thereon, under or by virtue of all present or future laws, ordinances, requirements, orders, directives, rules or regulations of the federal, state, county and city or local governments and of all other governmental authorities whatsoever. Lessee shall pay all taxes and assessments which shall prior to or during the Lease Term be levied, assessed or imposed on or become a lien upon the personal property of Lessee located upon the Property. Lessee shall be deemed to have complied with the covenants of this Lease if payment of such rents, taxes, sanitary assessments, and other governmental impositions and charges, shall have been made within any grace period allowed by law or by the governmental authority imposing the same during which payment is permitted without penalty or interest, and either before the same shall become a lien upon the Property or shall become delinquent. Lessee shall within ten (10) days after receipt of written request therefor by Lessor produce and deliver to Lessor reasonably satisfactory evidence of such payment. Lessor shall be responsible for the payment of all special assessments imposed upon the Property. All such rents, taxes, rates and charges, sanitary assessments, and other governmental impositions and charges which become due and are payable in the calendar year in which the Lease Term expires, shall be apportioned pro rata between Lessor and Lessee in accordance with the respective portions of such period during which the Lease Term shall be in effect. Lessee shall have the right to contest or review by legal proceedings, or in such other manner as it may deem suitable (which, if instituted, Lessee shall conduct promptly at its own expense, and free of any expense to Lessor, and, if necessary, in the name of Lessor), any tax, assessment, rate or charge, sanitary assessment, or other governmental imposition or charge aforementioned. Nothing herein contained shall be construed to require Lessee to pay any inheritance, estate, succession, transfer, gift, franchise, income, income profit or excess profit, capital stock, capital levy, corporate or unincorporated business tax or other similar tax, that is or may be imposed upon Lessor, its successors or assigns, or upon the rent payable by Lessee. In the event any sales tax shall be due on rent for the Property, then Lessee shall be responsible for paying and shall pay, when due, any such sales tax. ARTICLE IV COSTS AND EXPENSES OF LESSEE. All costs, expenses and obligations of every kind, including but not limited to utilities, repairs and maintenance relating to the Property which may arise or become due during the term of this Lease, shall be paid by Lessee, except as designated herein. Lessor shall be responsible for the payment of major repairs to the roof, the foundation and the structural walls. ARTICLE V COVENANTS OF LESSOR. Lessor covenants and agrees as follows: A. That Lessor owns the Property in fee simple and has full right, power and authority to enter into this Lease for the terms herein granted and that the Property may be used by Lessee during the entire term of this Lease for the purposes for which it is currently being used by Lessee. B. That Lessee, upon the payment of the Rent herein provided and upon the performance of all the terms of this Lease, shall at all times during the Lease Term and during any extension or renewal term, peaceably and quietly enjoy the property without any disturbance from Lessor or from any other person claiming through Lessor. C. That the Property currently conforms and complies with any and all applicable laws or private restrictions. D. That Lessor has no knowledge or notice of any pending or threatened law suits or insolvencies with respect to either Lessor or the Property. ARTICLE VI COVENANTS OF LESSEE. Lessee covenants and agrees as follows: A. To pay Lessor the Rent herein stipulated at the time and in the manner herein provided. B. To take good care of the Property and suffer no waste or damage and at the end or other expiration of the term of this Lease, to return the Property in its current condition, normal wear and tear excepted. C. To observe and comply with all presently existing State, City and County ordinances and regulations applicable to the Property, and all orders and requirements presently imposed by any other duly constituted governmental authority having jurisdiction over the Property. ARTICLE VII USE. 7.1 LAWFUL PURPOSE. Lessee may use the Property for any lawful purpose. Lessee shall not use or permit any of the Property to be used for any unlawful purpose. Lessee shall comply, at its own expense, with all statutes, regulations, rules, ordinances, and orders of any governmental body, department, or agency thereof which apply to or result from Lessee's use or occupancy of the Property. 7.2 LESSOR'S RIGHT TO ENTER PROPERTY. Lessor and its agents, employees, and contractors shall have the right to enter the Property during normal business hours, without undue interference with the conduct of Lessee's business therein, to inspect and examine the Property and to exhibit the Property to prospective purchasers, tenants and lenders. In the event of emergency, or if otherwise necessary to prevent injury to persons or damage to property, such entry to the Property may be made by force without any liability whatsoever on the part of Lessor for damage resulting from such forcible entry. ARTICLE VIII ASSIGNMENT AND SUBLETTING. 8.1 Lessee shall not, without Lessor's prior written consent, which shall not be unreasonably withheld or delayed: (i) assign, convey, mortgage, pledge, encumber, or otherwise transfer (whether voluntarily, by operation of law, or otherwise) this Lease or any interest under it; (ii) allow any transfer thereof or any lien upon Lessee's interest by operation of law; (iii) sublet the Property or any part thereof; or (iv) permit the use or occupancy of the Property or any part thereof by any one other than Lessee; and any attempt to consummate any of the foregoing without Lessor's consent shall be void. 8.2 Notwithstanding anything herein to the contrary, if at any time or from time to time during the Lease Term, Lessee desires to sublet all or a part of the Property or assign, convey, mortgage, pledge, encumber, or otherwise transfer the Lease or any interest under it, Lessee shall notify Lessor in writing (hereinafter referred to in this Article VIII as the "Notice") of the terms of the proposed subletting or assignment, the identity of the proposed assignee or sublessee, the area proposed to be sublet (if a sublease is proposed), and such other information as Lessor may request to evaluate Lessee's request to assign or sublet. Notwithstanding the provisions of this Article VIII, Lessee may sublet or assign, convey, mortgage, pledge, encumber, or otherwise transfer the Lease or any interest under it, to its parent corporation or to an affiliate or subsidiary corporation of which such parent corporation owns the majority of the shares of common and preferred stock without Lessor's prior written consent or approval. In such event, Lessee shall notify Lessor, in writing, of such an assignment or sublease, conveyance, mortgage, pledge, encumbrance, or other transfer prior to the commencement of the term of such assignment or sublease. 8.3 Within twenty (20) days of Lessor's receipt of the proposed assignment or sublease, conveyance, mortgage, pledge, encumbrance, or other transfer, and such requested additional information, Lessor shall approve or disapprove in writing the terms of the proposed assignment or sublease, conveyance, mortgage, pledge, encumbrance, or other transfer, and the proposed assignee or sublessee or other party thereto. Failure to so approve or disapprove shall be deemed approval by Lessor. If a fully executed counterpart of such assignment or sublease, conveyance, mortgage, pledge, encumbrance, or other transfer is not delivered to Lessor within forty-five (45) days after the date of Lessor's written approval, then Lessor's approval of same shall be deemed null and void and Lessee shall again comply with all the conditions of this Section 8.3 as if the Notice and options hereinabove referred to had not been given and received. 8.4 Lessee agrees to pay, as additional rental, to Lessor, on demand, reasonable costs incurred by Lessor in connection with any request by Lessee for Lessor to consent to any of the transactions contemplated by this Article VIII by Lessee. 8.5 If, with the consent of Lessor, this Lease is assigned or the Property or any part thereof is sublet or occupied by anybody other than Lessee, Lessor may, after default by Lessee, collect rent from the assignee, subtenant or occupant, and apply the net amount collected to the Rent, but no such assignment, subletting, occupancy, or collection shall be deemed (i) a waiver of any of Lessee's covenants contained in this Lease, (ii) the acceptance by Lessor of the assignee, subtenant, or occupant as Lessee, or (iii) the release of Lessee from further performance by Lessee of its covenants under this Lease. ARTICLE IX EMINENT DOMAIN. 9.1 If all or any substantial part of the Property, including but not limited to ten (10) percent of the parking, access, building or signage, should be taken for any public or quasi-public use under governmental law, ordinance, or regulation, or by right of eminent domain, or by private purchase in lieu thereof, and the taking would prevent or materially interfere with the use of the Property for the purpose for which it is then being used, this Lease shall terminate effective when the physical taking shall occur in the same manner as if the date of such taking were the date originally fixed in this Lease for the expiration of the Lease Term. 9.2 If part of the Property is taken for any public or quasi- public use under any governmental law, ordinance, or regulation, or by right of eminent domain, or by private purchase in lieu thereof, and this Lease is not terminated as provided in subsection (a) above, this Lease shall not terminate but the Rent payable hereunder during the unexpired portion of this Lease shall be reduced to such extent, if any, as may be fair and reasonable under all of the circumstances and Lessor shall undertake to restore the Property to a condition suitable for Lessee's use, as near to the condition thereof immediately prior to such taking as is reasonably feasible under all circumstances. 9.3 Lessee shall not share in any condemnation award or payment in lieu thereof or in any award for damages resulting from any grade change of adjacent streets, the same being hereby assigned to Lessor by Lessee; provided, however, that Lessee may separately claim and receive from the condemning authority, if legally payable, compensation for Lessee's removal and relocation costs and for Lessee's loss of business and/or business interruption. 9.4 Notwithstanding anything to the contrary contained in this Article 9, if during the Lease Term the use or occupancy of any part of the Property shall be taken or appropriated temporarily for any public or quasi-public use under any governmental law, ordinance, or regulation, or by right of eminent domain, this Lease shall be and remain unaffected by such taking or appropriation and Lessee shall continue to pay in full all rental payable hereunder by Lessee during the Lease Term. In the event of any such temporary appropriation or taking, Lessee shall be entitled to receive that portion of any award which represents compensation for the loss of use or occupancy of the Property during the Lease Term, and Lessor shall be entitled to receive that portion of any award which represents the cost of restoration and compensation for the loss of use or occupancy of the Property after the end of the term of this Term Lease. ARTICLE X INSURANCE. 10.1 Lessee shall carry fire and extended coverage insurance insuring Lessee's interest in its improvements and betterments to the Property and any and all furniture, equipment, supplies, and other property owned, leased, held, or possessed by it and contained therein, such insurance coverage to be in an amount equal to the full insurable value of such improvements and property. Lessee may, in the alternative, elect to self-insure the Property in whole or in part, provided such self-insurance, along with any and all additional third-party insurance shall equal the full insurable value of the Property. 10.2 Lessee also agrees to carry a policy or policies of comprehensive general liability insurance, including personal injury and property damage, with contractual liability endorsement, in the amount of One Million Dollars ($1,000,000.00) for property damage and One Million Dollars ($1,000,000.00) per occurrence for personal injuries or deaths of persons occurring in or about the Property. Said policies shall: (i) name Lessor as an additional insured and insure Lessor's contingent liability under this Lease, (ii) be issued by an insurance company which is acceptable to Lessor and licensed to do business in the State of Georgia, and (iii) provide that said insurance shall not be canceled unless thirty (30) days prior written notice shall have been given to Lessor. Certificates of insurance shall be delivered to Lessor by Lessee upon commencement of the term of the Lease and upon each renewal of said insurance. Lessee may, in the alternative, elect to self-insure the Property, in whole or in part, provided such self-insurance, along with any and all additional third-party insurance shall equal One Million Dollars ($1,000,000.00). 10.3 Lessee shall obtain from its insurers under all policies of fire, theft, public liability, worker's compensation, and other insurance maintained by it at any time during the Lease Term insuring or covering the Property or any portion thereof or operations therein, and shall in good faith endeavor to obtain a waiver of all rights of subrogation which the insurer might have against Lessor, if obtainable. ARTICLE XI INDEMNITY. Lessee agrees to indemnify and hold Lessor harmless from and defend Lessor against any and all claims or liability for any injury or death to any person or damage to any property whatsoever: A. occurring in, on or about the Property, to the extent such injury, death or damage shall be caused in part or in whole by the act, neglect or fault of, or omission of any duty with respect to the same, by Lessee, its agents, employees, contractors, invitees, licensees or tenants; B. arising from any work or thing whatsoever done by or benefiting the Lessee in or about the Property or from transactions of the Lessee concerning the Property; C. arising from any breach or event of default on the part of the Lessee in the performance of any covenant or agreement on the part of the Lessee to be performed pursuant to the terms of this Lease; or D. otherwise arising from any act or neglect of the Lessee, or any of its agents, employees, contractors, invitees, licensees or tenants. ARTICLE XII 12.1 LIABILITY OF LESSOR. Lessor shall not be liable to Lessee or to any person, firm, corporation, or other business association claiming by, through or under Lessee, for any defects known to Lessee in the Property; nor for the theft, mysterious disappearance, or loss of any property of Lessee from the Property. Lessor shall not be liable for any interference, disturbance, or act caused by any person other than Lessor, nor shall Lessee be relieved from any obligation herein because of such interference, disturbance, or act of any person other than Lessor. 12.2 LIMITATION OF LIABILITY. Lessor's obligations and liability with respect to this Lease shall be limited solely to Lessor's interest in the Property, as such interest is constituted from time to time, and Lessor shall not have any personal liability whatsoever with respect to this Lease. In any action or proceeding brought to enforce the obligation of Lessor to Lessee under this Lease, Lessor and Lessee agree that any final judgment or decree shall be enforceable against Lessor only to the extent of Lessor's interest in the Property, as aforesaid, and any such judgment or decree shall not be capable of execution against, nor be a lien on, any assets of Lessor other than its interest in the Property, as aforesaid. Lessor shall maintain a minimum of one million dollars ($1,000,000.00) equity in the Property. ARTICLE XIII EVENTS OF DEFAULT AND REMEDIES. 13.1 The occurrence of any of the following shall constitute an event of default: (a) The Rent or any other sum of money payable under this Lease is not paid when due; (b) Lessee's interest in the Lease or the Property shall be subjected to any attachment, levy, or sale pursuant to any order or decree entered against Lessee in any legal proceeding and such order or decree shall not be vacated within ninety (90) days of entry thereof; or (c) Lessee breaches or fails to comply with any term, provision, condition, or covenant of this Lease, other than the payment of Rent and any other sum due and payable hereunder. 13.2 Upon the occurrence of an event of default and, in the case of an event of default under subsection (a) above, if such event of default is not cured within five (5) days of receipt of written demand, and, in the case of an event of default under subsections (b) or (c) above, if such event of default is not cured within thirty (30) days after written notice of such event of default is given by Lessor to Lessee, or such longer period of time as is reasonably necessary under the circumstances. Lessor shall have the option to do and perform any one or more of the following in addition to, and not in limitation of, any other remedy or right permitted it by law or in equity or by this Lease: (a) Lessor, with or without terminating this Lease, may reenter the Property and perform, correct or repair any condition which shall constitute a failure on Lessee's part to keep, observe, perform, satisfy, or abide by any term, condition, covenant, agreement, or obligation of this Lease, and Lessee shall fully reimburse and compensate Lessor on demand for all costs and expenses reasonably incurred by Lessor in such performance, correction or repairing, including accrued interest as provided in the next sentence. All sums so expended to cure Lessee's default shall accrue interest from the date of demand until date of payment at a rate of interest per annum equal to the lesser of (i) sixteen percent (16%) per annum; or (ii) the highest rate permitted by law. (b) Lessor, with or without terminating this Lease, may immediately, or at any time thereafter, demand in writing that Lessee vacate the Property and thereupon Lessee shall vacate the Property and remove therefrom all property thereon belonging to or placed on the Property by, at the direction of, or with consent of Lessor within ten (10) days of receipt by Lessee of such notice from Lessor, whereupon Lessor shall have the right to reenter and take possession of the Property. Any such demand, reentry and taking possession of the Property by Lessor shall not of itself constitute an acceptance by Lessor of a surrender of this Lease or of the Property by Lessee and shall not of itself constitute a termination of this Lease by Lessor. (c) Lessor, with or without terminating this Lease, may immediately or at any time thereafter relet the Property or any part thereof for such time or times, at such rental or rentals and upon such other terms and conditions as Lessor in its commercially reasonable discretion may deem advisable, and Lessor may make any alterations or repairs to the Property which it may deem necessary or proper to facilitate such reletting; and Lessee shall pay all costs of such reletting including but not limited to the cost of any such alterations and repairs to the Property, attorneys' fees, and brokerage commissions; and if this Lease shall not have been terminated, Lessee shall continue to pay all rent and all other charges due under this Lease up to and including the date of beginning of payment of rent by any subsequent tenant of part or all of the Property, and thereafter Lessee shall pay monthly during the remainder of the term of this Lease the difference, if any, between the rent and other charges collected from any such subsequent tenant or tenants and the rent and other charges reserved in this Lease, but Lessee shall not be entitled to receive any excess of any such rents collected over the rents reserved herein. (d) Lessor may immediately or at any time thereafter terminate this Lease, and this Lease shall be deemed to have been terminated upon receipt by Lessee of written notice of such termination; upon such termination Lessor shall recover from Lessee all damages Lessor may suffer by reason of such termination including, without limitation, all arrearages in rentals, costs, charges, additional rentals, and reimbursements, the cost (including court costs and attorneys' fees) of recovering possession of the Property, the cost of any alteration of or repair to the Property which is necessary or proper to prepare the same for re-letting and, in addition thereto, Lessor shall have and recover from Lessee an amount equal to the excess if any, of the total amount of all rents and other charges to be paid by Lessee for the remainder of the term of this Lease over the then reasonable rental value of the Property for the remainder of the term of this Lease, such excess discounted to present value using a discount rate equal to six percent (6%). (e) Lessor shall have a good faith duty to mitigate his losses hereunder. 13.3 If Lessor re-enters the Property or terminates this Lease pursuant to any of the provisions of this Lease, Lessee hereby waives all claims for damages which may be caused by such re-entry or termination by Lessor. Lessee shall and does hereby agree to indemnify and hold Lessor harmless from any loss, cost (including court costs and attorneys' fees), or damages suffered by Lessor by reason of such re-entry or termination. No such re-entry or termination shall be considered or construed to be a forcible entry. 13.4 No course of dealing between Lessor and Lessee or any failure or delay on the part of Lessor in exercising any rights of Lessor under this Section 13 or under any other provisions of this Lease shall operate as a waiver of any rights of Lessor hereunder or under any other provisions of this Lease, nor shall any waiver of any event of default on one occasion operate as a waiver of any subsequent event of default or of any other event of default. No express waiver shall affect any condition, covenant, rule, or regulation other than the one specified in such waiver and that one only for the time and in the manner specifically stated. 13.5 The exercise by Lessor of any one or more of the rights and remedies provided in this Lease shall not prevent the subsequent exercise by Lessor of any one or more of the other rights and remedies herein provided. All remedies provided for in this Lease are cumulative and may, at the election of Lessor, be exercised alternatively, successively, or in any other manner and are in addition to any other rights provided for or allowed by law or in equity. ARTICLE XIV MISCELLANEOUS. 14.1 PRONOUNS. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the entity, person or persons may require. 14.2 INSOLVENCY OR BANKRUPTCY. The appointment of a receiver to take possession of all or substantially all of the assets of Lessee, or an assignment of Lessee for the benefit of creditors, or any action taken or suffered by Lessee under any insolvency, bankruptcy, or reorganization act, unless terminated or dismissed within eighty-five (85) days, shall at Lessor's sole option constitute a breach of this Lease by Lessee. Upon the happening of any such event or at any time thereafter, this Lease shall terminate. In no event shall this Lease be assigned or assignable by operation of law or by voluntary or involuntary bankruptcy proceedings or otherwise and in no event shall this Lease or any rights or privileges hereunder be an asset of Lessee under any bankruptcy, insolvency, or reorganization proceedings. 14.3 LATE PAYMENTS. Lessee shall pay, in the event Rent or other charge to be paid by Lessee hereunder is not paid when due, (A) a late fee of five percent (5.0%) of the amount past due, which late fee Lessee acknowledges is an agreed upon reimbursement to Lessor for the administrative expense incurred by Lessor as a result of Lessee's late payment and not a penalty and is reasonable in light of the difficulty to estimate costs; and (B) interest on the amount past due (excluding late fees) at a rate per annum equal to the lesser of (ii) twelve percent (12%) per annum; or (iii) the highest rate permitted by law, from due date until paid. Should Lessee make a partial payment of past due amounts, the amount of such partial payment shall be applied first, to late fees, second, to accrued but unpaid interest, and third, to past due amounts, in inverse order of their due date. 14.4 ATTORNEYS' FEES. In the event of any litigation arising out of this Lease or the relationships evidenced hereby, the prevailing party shall be entitled to receive from the other party, an amount equal to the prevailing party's actual attorneys' fees, reasonably incurred. 14.5 INTENTIONALLY LEFT BLANK 14.6 NO WAIVER OF RIGHTS. No failure or delay of Lessor to exercise any right or power given it herein or to insist upon strict compliance by Lessee of any obligation imposed on it herein and no custom or practice of either party hereto at variance with any term hereof shall constitute a waiver or a modification of the terms hereof by Lessor or any right it has herein to demand strict compliance with the terms hereof by Lessee. No person has or shall have any authority to waive any provision of this Lease unless such waiver is expressly made in writing and signed by Lessor. 14.7 ADDRESSES AND NOTICES. (a) Except for legal process which may also be served as by law provided or as provided in subsection (b) below, all notices required or desired to be given with respect to this Lease in order to be effective shall be in writing and shall be deemed to be given to and received by the party intended to receive such notice when hand delivered or three (3) days after such notice shall have been deposited, postage prepaid, to the United States mail, certified, return receipt requested, properly addressed to the addresses specified in item (c) of this Section. In the event of a change of address by either party, such party shall give written notice thereof in accordance with the foregoing. (b) To the extent permitted by law, Lessee hereby: (i) appoints and designates the Property as a proper place for service of process upon Lessee (provided, however, Lessor does not hereby waive the right to serve Lessee with process by any other lawful means); and (ii) expressly waives the service of any notice under any existing or future law of the State of Florida applicable to Lessors and tenants. (c) Lessor: Donald C. Martin 4570 Henderson Mill Road Mansfield, Georgia 30341 Lessee: Electrical Distributors, Inc. 5180 Peachtree Road Atlanta, Georgia 30341 14.8 ENTIRE AGREEMENT AND EXHIBITS. This Lease constitutes and contains the sole and entire agreement of Lessor and Lessee and no prior or contemporaneous oral or written representation or agreement between the parties and affecting the Property shall have legal effect. No modification or amendment of this Lease shall be binding upon the parties unless such modification or amendment is in writing and signed by Lessor and Lessee. The content of each and every exhibit which is referenced in this Lease as being attached hereto is incorporated into this Lease as fully as if set forth in the body of this Lease. 14.9 SUBORDINATION NON-DISTURBANCE AND ATTORNMENT. (a) Except as provided in subsections (d) and (e) below, this Lease and all rights of Lessee hereunder are and shall be subject and subordinate to the lien of any mortgage, deed to secure debt, deed of trust, or other instrument in the nature thereof which may now or hereafter affect Lessor's estate or interest in and to the Property and to any other instrument encumbering the fee title of the Property and to any modifications, renewals, consolidations, extensions, or replacements thereof. (b) Subsection (a) above shall be self-operative, and no further instrument of subordination shall be required by the holder of any such instrument affecting or encumbering the Property. In confirmation of such subordination, Lessee shall, upon demand, at any time or times, execute, acknowledge, and deliver to Lessor or the holder of any such mortgage, deed to secure debt, deed of trust, or other instrument, without expense, any and all instruments that may be requested by Lessor or such holder to evidence the subordination of this Lease and all rights hereunder to the lien of any such mortgage, deed to secure debt, deed of trust, or other instrument, and each such renewal, modification, consolidation, replacement, and extension thereof, and if Lessee shall fail at any time, within ten (10) days following the giving of a written request therefor, to execute, acknowledge, and deliver any such instrument, Lessor or such holder or such lessor, in addition to any other remedies available to it in consequence thereof, may execute, acknowledge, and deliver the same as the attorney-in-fact of Lessee and in Lessee's name, place, and stead, and Lessee hereby irrevocably makes, constitutes, and appoints Lessor or such holder or such lessor, in their respective successors and assigns, such attorney-in-fact for that purpose. (c) Lessee shall, upon demand, at any time or times, execute, acknowledge, and deliver to Lessor or to the holder of any mortgage, deed to secure debt, deed of trust, or other instrument affecting or encumbering the Property, without expense, any and all instruments that may be necessary to make this Lease superior to the lien of any such mortgage, deed to secure debt, deed of trust or other instrument or the grant of any such ground lease, and each renewal, modification, consolidation, replacement, and extension thereof, and, if Lessee shall fail at any time, within ten (10) days following the giving of a written request therefor, to execute, acknowledge, and deliver any such instrument, Lessor or such holder or such lessor, in addition to any other remedies available to it in consequence thereof, may execute, acknowledge, and deliver the same as the attorney-in-fact of Lessee and in Lessee's name, place, and stead, and Lessee hereby irrevocably makes, constitutes, and appoints Lessor or such holder or such lessor, and their respective successors and assigns, such attorney- in-fact for that purpose. (d) If the holder of any mortgage, deed to secure debt, deed of trust or other instrument affecting or encumbering the Property shall hereafter succeed to the rights of Lessor under this Lease, whether through possession or foreclosure action or exercise of private power of sale or delivery of a new lease, Lessee shall, at the option of such holder or lessor, attorn to and recognize such successor as Lessee's Lessor under this Lease as of the date of such succession to Lessor's interest and shall promptly execute and deliver any instrument that may be necessary to evidence such attornment, and Lessee hereby irrevocably appoints Lessor or such holder or such lessor the attorney-in-fact of Lessee to execute and deliver such instrument on behalf of Lessee should Lessee refuse and fail to do so within ten (10) days after Lessor or such holder or such lessor shall have given notice to Lessee requesting the execution and delivery of such instrument. Upon such attornment, this Lease shall continue in full force and effect as a direct lease between such successor Lessor and Lessee, subject to all of the terms, covenants, and conditions of this Lease. (e) Lessor shall obtain from any future holder of any deed to secure debt encumbering the Property, or from the current holder in the event of any refinancing or future advance, a non-disturbance agreement which shall provide that as long as Lessee remains not in default under this Lease, such holder shall not disturb Lessee's tenancy. 14.10ESTOPPEL CERTIFICATE. At any time and from time to time, Lessee, on or before the date specified in a request therefor made by Lessor, which date shall not be earlier than ten (10) days from the making of such request, shall execute, acknowledge, and deliver to Lessor a certificate evidencing whether or not (i) this Lease is in full force and effect, (ii) this Lease has been amended in any way, (iii) there are any existing events of default on the part of Lessor hereunder to the knowledge of Lessee and specifying the nature such events of default, if any, and (iv) the date to which rent, and other amounts due hereunder, if any have been paid. Each certificate delivered pursuant to this Section may be relied on by any prospective purchaser or transferee of Lessor's interest hereunder or of any part of Lessor's property or by any mortgagee of Lessor's interest hereunder or of any part of Lessor's property or by an assignee of any such mortgagee. 14.11SEVERABILITY. If any clause or provision of this Lease is or becomes illegal, invalid, or unenforceable because of present or future laws or any rule or regulation of any governmental body or entity, effective during its term, the intention of the parties hereto is that the remaining parts of this Lease shall not be affected thereby, unless such invalidity is essential to the rights of either party hereto in which event this Lease shall terminate. 14.12CAPTIONS. The captions used in this Lease are for convenience only and do not in any way limit or amplify the terms and provisions hereof. 14.13SUCCESSORS AND ASSIGNS. The words "Lessor" and "Lessee" as used herein shall include the respective contracting party, whether singular or plural, and whether an individual, masculine or feminine, or a partnership, joint venture, business trust, or corporation. The provisions of this Lease shall inure to the benefit of and be binding upon Lessor and Lessee, and their respective successors, heirs, legal representatives, and assigns, subject, however, in the case of Lessee, to the provisions of Article VIII hereof. 14.14FORCE MAJEURE. A party to this Lease shall be excused from the performance of its duties and obligations under this Lease, except obligations for the payment of money such as Rent, for the period of delay, but in no event longer than 90 days, caused by labor disputes, governmental regulations, riots, war, insurrection, acts of God or other causes beyond the control of the party whose performance is being excused (but such causes shall not include insufficiency of funds). 14.15LESSOR'S REPRESENTATIONS. Lessor hereby represents and warrants that: Lessor is the owner of the Property; there are no liens, encumbrances or easements affecting the Property except as described in Exhibit "B" attached hereto; Lessor is in undisputed and peaceful possession of the Property and has a perfect right to convey good, fee simple, merchantable title to the Property; there currently exists adequate access, parking and utility service to the Property for the purposes anticipated by the parties hereto; there is no outstanding indebtedness, unpaid bill or lien against the Property for equipment, appliances, other fixtures attached to the Property, sewerage, water main, sidewalk or other street improvements; there are no retention title contracts, bills of sale or other encumbrances, of record or otherwise, affecting the title to any personal property installed on the Property; the lines and corners of the Property are clearly marked, and that there are no disputes concerning the location of the lines and corners; there are no pending suits, proceedings, judgments, bankruptcies, liens or executions against the Lessor, either in the county where the Property is located or in any other county in the State of Georgia; no improvements or repairs have been made on the Property during the ninety-five (95) days immediately preceding this date; and there are no outstanding bills incurred for labor or materials used in making improvements or repairs on the Property, for services of architects, surveyors, engineers, or registered foresters incurred in connection therewith. 14.16 HAZARDOUS SUBSTANCES. (a) Lessee hereby covenants that Lessee shall not cause or permit any "Hazardous Substances" (as hereinafter defined) to be placed, held, located or disposed of in, on or at the Property or any part thereof except in full compliance with all applicable laws, rules, ordinances and similar provisions, and neither the Property nor any part thereof shall ever be used as a dump site or storage site (whether permanent or temporary) for any Hazardous Substances during the Lease Term. (b) Lessee hereby agrees to indemnify Lessor and hold Lessor harmless from and against any and all losses, liabilities, including strict liability, damages, injuries, expenses, including reasonable attorneys' fees, costs of any settlement or judgment and claims of any and every kind whatsoever paid, incurred or suffered by, or asserted against, Lessor by any person or entity or governmental agency for, with respect to, or as a direct or indirect result of, the presence on or under, or the escape, seepage, leakage, spillage, discharge, emission, discharging or release from, the Property of any Hazardous Substance (including, without limitation, any losses, liabilities, including strict liability, damages, injuries, expenses, including reasonable attorneys' fees, costs of any settlement or judgment or claims asserted or arising under the Comprehensive Environmental Response, Compensation and Liability Act, any so-called federal, state or local "Superfund" or "Superlien" laws, statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to or imposing liability, including strict liability, substances or standards of conduct concerning any Hazardous Substance), provided, however, that the foregoing indemnity is limited to matters arising solely from Lessee's violation of the covenant contained in subsection (a) above. (c) For purposes of this Lease, "Hazardous Substances" shall mean and include those elements or compounds which are contained in the list of hazardous substances adopted by the United States Environmental Protection Agency (the "EPA") or the list of toxic pollutants designated by Congress or the EPA or which are defined as hazardous, toxic, pollutant, infectious or radioactive by any other Federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to, or imposing liability or standards of conduct concerning, any hazardous, toxic or dangerous waste, substance or material, as now or at any time hereafter in effect. (d) Lessor shall have the right but not the obligation, and without limitation of Lessor's rights under this Lease, to enter onto the Property or to take such other actions as it deems necessary or advisable to cleanup, remove, resolve or minimize the impact of, or otherwise deal with, any Hazardous Substance following receipt of any notice from any person or entity (including without limitation the EPA) asserting the existence of any Hazardous Substance in, on or at the Property or any part thereof which, if true, could result in an order, suit or other action against Lessee and/or Lessor. All reasonable costs and expenses incurred by Lessor in the exercise of any such rights, which costs and expenses result from Lessee's violation of the covenant contained in subsection (a) above, shall be deemed additional rental under this Lease and shall be payable by Lessee upon demand. (e) Notwithstanding the foregoing, Lessor hereby warrants that there is no Hazardous Substance affecting the Property and indemnifies Lessee and holds Lessee harmless from and against any and all losses, liabilities, including strict liability, damages, injuries, expenses, including reasonable attorneys' fees, costs of any settlement or judgment and claims of any and every kind whatsoever paid, incurred or suffered by, or asserted against, Lessee by any person or entity or governmental agency for, with respect to, or as a direct or indirect result of, the presence on or under, or the escape, seepage, leakage, spillage, discharge, emission, discharging or release from, the Property of any Hazardous Substance (including, without limitation, any losses, liabilities, including strict liability, damages, injuries, expenses, including reasonable attorneys' fees, costs of any settlement or judgment or claims asserted or arising under the Comprehensive Environmental Response, Compensation and Liability Act, any so-called federal, state or local "Superfund" or "Superlien" laws, statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to or imposing liability, including strict liability, substances or standards of conduct concerning any Hazardous Substance) prior to the date hereof. (f) This Section 14.16 shall survive cancellation, termination or expiration of this Lease. 14.17 APPLICABLE LAW. This Lease shall be construed in accordance with the laws of the State of Georgia. ARTICLE XV RIGHT OF FIRST REFUSAL. (a) If Lessor makes a bona fide written offer to sell or lease the Property or any part thereof to any prospective purchaser or tenant during the term of this Lease or for an additional period of ninety (90) days thereafter, or should Lessor receive an acceptable offer to do so, Lessor shall notify Lessee in writing (such notice being hereinafter called the "Offer Notice") of Lessor's intention to sell or lease the Property. The Offer Notice shall specifically describe the terms and the prospective purchaser or tenant with whom such purchase and sale or lease would be entered into (unless confidentiality of such prospective purchaser or tenant is required by such prospective purchaser or tenant). The Offer Notice shall also constitute an offer by Lessor to sell or lease the Property to Lessee in accordance with the terms of this Article XV. Lessee shall have twenty (20) days after its receipt of such Offer Notice to accept such offer pursuant to this First Refusal Right and to purchase or lease the Property from Lessor in accordance with the terms of this Article XV. (b) Acceptance by Lessee of the offer set forth in the Offer Notice shall be deemed effective only if such acceptance is given to Lessor in a written notice of acceptance (the "Acceptance Notice") specifically referring to the Offer Notice to which it relates, received by Lessor within the twenty (20) day period prescribed above for such acceptance. If Lessee duly and timely delivers to Lessor its Acceptance Notice in accordance with this Article XV, then Lessor and Lessee shall, within thirty (30) days of Lessor's receipt of such Acceptance Notice, execute a contract to purchase and sell or an amendment to this Lease which conforms to the terms set forth in the Offer Notice. (c) If Lessee elects not to exercise this First Refusal Right, Lessor shall be entitled to sell or lease the Property to the prospective purchaser or tenant that prompted the Offer Notice, or an affiliate thereof. (d) Notwithstanding anything in this Article XV the contrary, Lessee shall have no right to exercise any right or option under this Article XV, nor shall Lessor have any obligation to submit an Offer Notice to Lessee with respect to the Property before entering into a third party contract or lease with respect thereto, or to enter into any sale or lease of the Property with Lessee, at any time during which either (i) Lessee is in default, or an event of default exists with respect to Lessee, under this Lease, or (ii) this Lease is not in full force and effect. (e) Nothing in this Article XV shall be deemed to cause an early termination of this Lease. ARTICLE XVI USUFRUCT. This Lease gives Lessee a usufruct only and does not create an estate in the Lessee subject to lien or to levy and sale. IN WITNESS WHEREOF, the undersigned parties have caused this Lease to be signed and sealed on the day and year first above written. LESSOR: /s/ Donald C. Martin (SEAL) DONALD C. MARTIN LESSEE: ELECTRICAL DISTRIBUTORS, INC. By: /s/ Donald C. Martin Title: President [CORPORATE SEAL] EX-10 3 EXHIBIT 10.7 CONSULTING AGREEMENT This Consulting Agreement (the "Agreement") is made and entered into this 30th day of June, 1993 by and among HUGHES SUPPLY, INC., a Florida corporation, ("Hughes Supply") and DONALD C. MARTIN ("Consultant"). WHEREAS, Hughes Supply and Consultant are parties to an Agreement (the "Acquisition Agreement") providing for Hughes Supply's acquisition of all the outstanding shares of Electrical Distributors, Inc., a Georgia corporation, ("EDI") and certain other matters; and WHEREAS, both Hughes Supply and EDI are engaged in the business of wholesale electrical supplies; and WHEREAS, Consultant has been the President, a Director and principal shareholder of EDI; and WHEREAS, Hughes Supply values Consultant's expertise and advice, and desires Consultant to provide his expertise and advice to officers and managerial employees of Hughes Supply; and WHEREAS, Hughes Supply and Consultant desire to enter into this Agreement in order to comply with the obligations imposed by Section 5.9 of the Acquisition Agreement; NOW, THEREFORE, in consideration of the premises, the mutual covenants contained herein, and for other good and valuable consideration, the receipt, adequacy and sufficiency of which being hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows: 1. Consulting Services. Hughes Supply hereby retains Consultant as an advisor and consultant to Hughes Supply. Consultant shall, throughout the term of this Agreement, advise and consult with officers and managerial employees of Hughes Supply with respect to all matters relating to or affecting Hughes Supply's business operations including, without limitation, the operations of EDI. The services shall not require the performance of ordinary executive or administrative duties or involve substantial periods of working time, but instead shall consist of Consultant being available to counsel with officers and managerial employees of Hughes Supply at such reasonable times and places as may be mutually agreed upon. 2. Term. The term of this Agreement shall be five (5) years, commencing July 1, 1993 and ending on June 30, 1998. 3. Payment for Services. Hughes Supply shall pay Consultant the sum of Two Hundred Fifty Thousand Dollars ($250,000.00) for his performance hereunder, payable in equal consecutive annual installments of Fifty Thousand Dollars ($50,000.00) each, commencing August 1, 1993. In addition, Hughes Supply shall reimburse Consultant for (i) all traveling and living expenses which Consultant incurs while away from the area of Atlanta, Georgia in connection with his performance under this Agreement; and (ii) all other reasonable expenses which Consultant incurs in performing his obligations under this Agreement. In the event of Consultant's death or disability, all sums to be paid by Hughes Supply hereunder shall be paid to Consultant's estate as and when due hereunder, notwithstanding Consultant's inability to perform any further services hereunder. 4. Termination. Hughes Supply may sooner terminate this Agreement upon 30 days written notice if (and only if) Consultant is convicted of the crime of fraud, embezzlement or other felony related to the performance of Consultant's duties under this Agreement. 5. Independent Contractor. The parties hereto acknowledge and agree that Consultant's performance under this Agreement shall be as an independent contractor, and not as an employee of Hughes Supply. 6. Miscellaneous. a. Benefit. This Agreement shall inure to the benefit of and be binding upon (i) Hughes Supply, its successors and assigns, including, but not limited to, any corporation which may acquire all or substantially all of Hughes Supply' assets and business, any corporation with and into which Hughes Supply may be consolidated or merged, or any corporation that is the successor corporation in an exchange of stock; and (ii) Consultant, his heirs, guardians and personal and legal representatives. b. Entire Agreement/Modification. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and there are no other commitments or agreements binding the parties with respect to the subject matter hereof other than set forth herein. This Agreement may be amended or modified only by an instrument in writing executed by the parties hereto. c. Governing Law. This Agreement shall be governed by, construed and enforced in all respect in accordance with the laws of the State of Georgia. d. Captions. Titles or captions of sections contained in this Agreement are inserted only as a matter of convenience and for reference, and in no way define, limit, extend or prescribe the scope of this Agreement or the intent of any provision. e. Counterparts. This Agreement may be executed in counterparts, each which shall constitute one and the same Agreement. f. Notices. Any notice or other communication given hereunder shall be in writing and either be delivered personally or mailed, certified or registered mail, postage prepaid, and shall be deemed given when so delivered personally, or if mailed, two (2) days after the date of mailing, as follows: If to Hughes Supply, Inc.: Attn: J. Stephen Zepf, CFO 20 North Orange Avenue Suite 200 Orlando, Florida 32802-2273 With a copy to: Robert N. Blackford Maguire, Voorhis & Wells, P.A. Two South Orange Plaza 2 South Orange Avenue Orlando, Florida 32801 And if to Consultant, to: Donald C. Martin 5180 Peachtree Road Atlanta, Georgia 30341 With a copy to: John M. Bovis, P.C. Bovis, Kyle & Burch 53 Perimeter Center East Third Floor Atlanta, Georgia 30346-2298 The parties may change the persons and addresses to which notices or other communications are to be sent by giving written notice of any such change in the manner provided herein for giving notice. g. Construction. The parties acknowledge that they have had the opportunity to participate equally in the drafting of this Agreement and that in the event of a dispute, no party shall be treated, for any purpose, as the author of this Agreement or have any ambiguity resolved against him on account thereof. IN WITNESS WHEREOF, the parties have executed, acknowledged, sealed and delivered this Agreement. HUGHES SUPPLY, INC., a Florida Corporation By: /s/ David H. Hughes David H. Hughes Title: President and CEO Attest: By: /s/ Robert N. Blackford Title: Secretary [CORPORATE SEAL] /s/ Donald C. Martin (SEAL) DONALD C. MARTIN EX-11 4 EXHIBIT 11.1 Exhibit 11.1 HUGHES SUPPLY, INC. SUMMARY SCHEDULE OF EARNINGS PER SHARE CALCULATIONS - --------------------------------------------------- Potentially dilutive securities: a) Options for common stock, issued under stock option plans. b) 7% Convertible subordinated debentures, due May 1, 2011.
Year Year Year Ended Ended Ended 1/31/92 1/29/93 1/28/94 ------- ------- ------- Line - ---- SHARES ------ 1 Average shares outstanding 4,551,997 4,552,171 4,552,798 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 0 12,014 96,135 ----------- ----------- ----------- 3 Shares used in calculating Earnings Per Common and Common Equivalent Share 4,551,997 4,564,185 4,648,933 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 30 27,855 84,949 5 Incremental shares (debentures) - Assuming debentures were converted at beginning of period (or time of issuance, if later) at most advantageous (for security holder) conversion rate that becomes effective within 10 years * 0 0 1,084,707 ----------- ----------- ----------- 6 Shares used in calculating Earnings Per Common Share - Assuming Full Dilution 4,552,027 4,592,040 5,818,589 =========== =========== ===========
HUGHES SUPPLY, INC. Year Year Year Ended Ended Ended 1/31/92 1/29/93 1/28/94 ------- ------- ------- Line - ---- EARNINGS -------- 7 Net income per financial statements, used in calculating Earnings Per Common Share and Earnings Per Common and Common Equivalent Share $(3,858,829) $ 2,478,267 $ 6,285,738 8 Incremental earnings (debentures) - Assuming interest charges applicable to convertible debentures (and nondiscretionary adjustments that would have been made based on net income) are taken into account in determining balance of income applicable to common stock * 0 0 996,464 ----------- ----------- ----------- 9 Earnings used in calculating Earnings Per Common Share - Assuming Full Dilution $(3,858,829) $ 2,478,267 $ 7,282,202 =========== =========== ===========
Year Year Year Ended Ended Ended 1/31/92 1/29/93 1/28/94 ------- ------- ------- Line - ---- RESULTING PER SHARE DATA ------------------------ 10 Earnings per common share (Line 7/Line 1) $ (0.85) $ 0.54 $ 1.38 =========== =========== =========== 11 Earnings per common share and common equivalent share (Line 7/Line 3) $ (0.85) $ 0.54 $ 1.35 =========== =========== =========== 12 Dilution 0.0% 0.0% 2.2% =========== =========== =========== 13 Earnings per common share - assuming full dilution (Line 9/Line 6) $ (0.85) $ 0.54 $ 1.25 =========== =========== =========== 14 Dilution (antidilution) 0.0% 0.0% 9.4% =========== =========== ===========
15 Used in statements of operations: [ ] Line 10, if dilution less than 3%, or antidilution, exists for all periods. [ X ] Lines 11 and 13, if dilution >= 3% for any period. * Convertible debentures are antidilutive for fiscal years ending January 29, 1993 and January 31, 1992, and, consequently, are not used in the calculation of fully diluted earnings per share for those years. EX-13 5 EXHIBIT 13.1 1994 ANNUAL REPORT - PAGE 3 MARKET PRICE AND DIVIDEND DATA
Dividends Per Market Price (1) Share (2) Fiscal Years (3) Fiscal Years (3) 1994 1993 1994 1993 HIGH LOW HIGH LOW First quarter $15 3/8 $13 1/4 $13 1/4 $11 3/4 $ .03 $ .03 Second quarter $17 1/4 $13 1/2 $13 $11 1/4 $ .04 $ .03 Third quarter $19 1/2 $15 3/4 $16 3/8 $10 7/8 $ .04 $ .03 Fourth quarter $24 $17 3/8 $15 5/8 $11 7/8 $ .05 $ .03 Year's high and low $24 $13 1/4 $16 3/8 $10 7/8 Total dividends $ .16 $ .12
(1) Per share prices as reported in the Wall Street Journal for New York Stock Exchange. (2) See Note 3 of Notes to Consolidated Financial Statements for dividend restrictions. (3) The Company's fiscal year ends on the last Friday in January. SELECTED QUARTERLY FINANCIAL DATA (in thousands, except per share data)
Net Gross Net Earnings Per Share (1) Average Shares (1) Sales Profit Income Primary Fully Diluted Primary Fully Diluted Fiscal Quarter 1994 First $ 148,514 $ 28,893 $ 699 $ .15 $ .15 4,605 4,605 Second 163,950 32,746 1,718 .37 .34 4,619 5,718 Third 178,993 34,580 1,843 .40 .36 4,665 5,751 Fourth 169,481 35,001 2,026 .43 .39 4,694 5,820 Year $ 660,938 $131,220 $6,286 $ 1.35 $ 1.25 4,649 5,819 Fiscal Quarter 1993 (2) First $ 131,119 $ 25,968 $ 183 $ .04 $ .04 4,554 4,554 Second 142,155 27,230 562 .12 .12 4,552 4,552 Third 145,237 27,879 757 .17 .17 4,578 4,578 Fourth(3) 137,285 27,346 976 .21 .21 4,591 4,593 Year $ 555,796 $108,423 $2,478 $ .54 $ .54 4,564 4,592
(1) Calculated independently for each period and, consequently, the sum of the quarters may differ from the annual amount. (2) Restated for 1994 pooling of interests. (3) The fourth quarter of fiscal 1993 results included a pre-tax gain of $810 on the sale of transportation equipment. - -------------------------------------------------------------------------------- 1994 ANNUAL REPORT - PAGE 14 CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) Fiscal Years Ended
January 28, January 29, January 31, 1994 1993 1992 Net Sales $660,938 $555,796 $509,192 Cost of Sales 529,718 447,373 410,132 Gross Profit 131,220 108,423 99,060 Operating Expenses: Selling, general and administrative 109,760 94,810 91,114 Depreciation and amortization 7,465 6,636 7,149 Provision for doubtful accounts 1,671 1,775 2,542 Total operating expenses 118,896 103,221 100,805 Operating Income (Loss) 12,324 5,202 (1,745) Non-Operating Income and (Expenses): Interest and other investment income 1,856 1,865 1,857 Interest expense (4,610) (4,760) (5,991) Other, net 988 1,709 56 (1,766) (1,186) (4,078) Income (Loss) Before Income Taxes 10,558 4,016 (5,823) Income Taxes (Benefits) 4,272 1,538 (1,964) Net Income (Loss) $ 6,286 $ 2,478 $ (3,859) Earnings (Loss) Per Share: Primary $ 1.35 $ .54 $ (.85) Fully diluted $ 1.25 $ .54 $ (.85) Average Shares Outstanding: Primary 4,649 4,564 4,552 Fully diluted 5,819 4,592 4,552
See accompanying notes to consolidated financial statements. - ------------------------------------------------------------------------------- 1994 ANNUAL REPORT - PAGE 15 CONSOLIDATED BALANCE SHEETS (dollars in thousands) January 28, January 29, ASSETS 1994 1993 Current Assets: Cash and cash equivalents $ 1,078 $ 2,253 Accounts receivable, less allowance for losses of $3,914 and $3,037 97,765 78,346 Inventories 94,223 84,817 Deferred income taxes 4,972 4,609 Other current assets 5,532 5,398 Total current assets 203,570 175,423 Property, Plant and Equipment, at cost: Land 12,353 12,160 Buildings and improvements 37,097 35,249 Transportation equipment 19,674 16,145 Furniture, fixtures and equipment 14,843 13,466 Leased property under capital leases 10,794 10,794 Total 94,761 87,814 Less accumulated depreciation and amortization (45,439) (39,892) Net property, plant and equipment 49,322 47,922 Deferred Income Taxes 2,210 1,786 Other Assets 8,303 5,607 $ 263,405 $ 230,738 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Current portion of long-term debt $ 898 $ 2,414 Accounts payable 52,053 46,381 Accrued compensation and benefits 7,257 4,719 Other current liabilities 8,401 8,273 Total current liabilities 68,609 61,787 Long-Term Debt, less current portion: Notes and subordinated debentures 95,367 76,736 Capital lease obligations 3,859 4,584 Total long-term debt 99,226 81,320 Other Noncurrent Liabilities 1,143 965 Total liabilities 168,978 144,072 Commitments and Contingencies 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; 10,000,000 shares authorized; 5,075,670 and 5,453,249 shares issued 5,076 5,453 Capital in excess of par value 15,410 22,410 Retained earnings 80,425 72,761 100,911 100,624 Less treasury stock, 418,566 shares and 901,055 shares, at cost (6,484) (13,958) Total shareholders' equity 94,427 86,666 $ 263,405 $ 230,738 See accompanying notes to consolidated financial statements. - ------------------------------------------------------------------------------- 1994 ANNUAL REPORT - PAGE 16 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (dollars in thousands)
Capital in Common Stock Excess of Retained Treasury Stock Shares Amount Par Value Earnings Shares Amount Balance, January 25, 1991, as previously reported 5,079,344 $5,079 $22,740 $72,712 902,620 $(13,982) Adjustments for Electrical Distributors, Inc. pooling of interests 374,998 375 (326) 2,950 - - Balance, January 25, 1991, as restated 5,454,342 5,454 22,414 75,662 902,620 (13,982) Net loss - - - (3,859) - - Cash dividends - $.24 per share - - - (1,003) - - Treasury shares issued under stock option plans - - - (5) (1,465) 22 Purchase and retirement of common shares (1,093) (1) (4) (10) - - Balance, January 31, 1992 5,453,249 5,453 22,410 70,785 901,155 (13,960) Net income - - - 2,478 - - Cash dividends - $.12 per share - - - (502) - - Treasury shares issued - - - - (100) 2 Balance, January 29, 1993 5,453,249 5,453 22,410 72,761 901,055 (13,958) Net income - - - 6,286 - - Cash dividends - $.16 per share - - - (724) - - 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 5,075,670 $5,076 $15,410 $80,425 418,566 $ (6,484)
See accompanying notes to consolidated financial statements. - ------------------------------------------------------------------------------- 1994 ANNUAL REPORT - PAGE 17 CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
Fiscal Years Ended January 28, January 29, January 31, 1994 1993 1992 Increase (Decrease) in Cash and Cash Equivalents: Cash flows from operating activities: Cash received from customers $644,667 $546,848 $503,780 Cash paid to suppliers and employees (638,724) (535,645) (490,688) Interest and other investment income received 1,856 1,865 1,857 Interest paid (4,693) (4,875) (6,098) Income taxes (paid) refunded (5,361) (1,677) 1,438 Net cash provided by (used in) operating activities (2,255) 6,516 10,289 Cash flows from investing activities: Proceeds from sale of property, plant and equipment 704 1,810 1,126 Capital expenditures (8,257) (8,702) (4,992) Business acquisitions, net of cash (3,934) - - Net cash used in investing activities (11,487) (6,892) (3,866) Cash flows from financing activities: Net borrowings (payments) under short-term debt arrangements 16,733 (2,267) 10,398 Proceeds from long-term debt - 1,444 - Principal payments on: Long-term notes (2,918) (1,678) (12,038) Capital lease obligations (660) (602) (550) Proceeds from issuance of common shares under stock option plans 77 - 17 Purchase of common shares (49) - (15) Dividends paid (616) (502) (1,254) Net cash provided by (used in) financing activities 12,567 (3,605) (3,442) Net Increase (Decrease) in Cash and Cash Equivalents (1,175) (3,981) 2,981 Cash and Cash Equivalents, beginning of year 2,253 6,234 3,253 Cash and Cash Equivalents, end of year $ 1,078 $ 2,253 $ 6,234
See accompanying notes to consolidated financial statements. - ------------------------------------------------------------------------------- 1994 ANNUAL REPORT - PAGE 18 HUGHES SUPPLY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - 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 to the construction industry. Major product lines distributed by the Company include electrical, plumbing and electric utility equipment, building materials, water and sewer equipment, heating and air conditioning equipment, and pipe, valves and fittings. The Company's principal customers are electrical, plumbing and mechanical contractors, electric utility companies, and 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 a company acquired and accounted for as a pooling 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 and 1993 contained 52 weeks; fiscal year 1992 contained 53 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 of Hughes Supply, Inc. is determined by a moving average cost method which approximates the first-in, first-out (FIFO) method. Its subsidiaries value their inventories principally on FIFO or on cost methods which approximate FIFO. Property, Plant and Equipment: Plant and equipment is depreciated using both straight-line and declining balance methods based on the following estimated useful lives: Buildings and improvements 5-40 years Transportation equipment 2- 7 years Furniture, fixtures and equipment 3-15 years Leased property under capital leases 20-40 years 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 is being amortized by the straight-line method over 25 years. Debt issuance costs are deferred and amortized by the straight-line method over the term of the related debt, principally 25 years. 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. Valuation allowances are established to reduce deferred tax assets to the amount expected to be realized. 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. Unless the results are antidilutive, fully diluted earnings per share assumes the conversion of the 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. NOTE 2 - SHORT-TERM DEBT: Banks: The Company and its subsidiaries have bank lines of credit for short-term borrowings aggregating $2,000,000 at January 28, 1994 and $26,000,000 at January 29, 1993 (subject to borrowing limitations under the long-term debt covenants) under which $1,500,000 and $18,754,000 was outstanding at January 28, 1994 and January 29, 1993, respectively. The lines, which generally provide for interest at prime or money market rates, expire within one year. During fiscal 1994, 1993 and 1992, borrowings under these short-term debt arrangements and under revolving credit arrangements (see Note 3) reached month-end maximums of $46,875,000, $30,200,000 and $26,893,000, respectively. The average daily borrowings amounted to $35,918,000 in 1994, $22,307,000 in 1993 and $17,900,000 in 1992. Weighted average interest rates of 3.7% in 1994, 4.3% in 1993 and 6.2% in 1992 were calculated by dividing the interest expense during the year for such borrowings by the average daily borrowings. The weighted average interest rate on short-term borrowings as of January 28, 1994 and January 29, 1993 was 3.5% and 3.8%, respectively. Commercial Paper: The Company has a commercial paper program backed by a revolving credit facility ($25,000,000 as of January 28, 1994) with a group of banks (see Note 3). Commitment fees of .125% per annum are paid on the unused portion of the credit line. During fiscal 1994, 1993 and 1992, commercial paper borrowings reached - ------------------------------------------------------------------------------- 1994 ANNUAL REPORT - PAGE 19 month-end maximums of $29,776,000, $29,873,000 and $28,609,000, respectively. Average daily borrowings amounted to $25,358,000 in 1994, $26,917,000 in 1993 and $25,168,000 in 1992. Weighted average interest rates of 3.3% in 1994, 3.9% in 1993 and 5.9% in 1992 were calculated by dividing the interest expense during the year for such borrowings by the average daily borrowings. The weighted average interest rate on outstanding borrowings of $25,000,000, and $29,153,000 as of January 28, 1994 and January 29, 1993 was 3.2% and 3.5%, respectively. The Company's credit facilities (see Note 3) enabled the Company to refinance short-term borrowings on a long-term basis to the extent that these credit facilities were unused. Accordingly, $26,500,000 and $47,907,000 of short-term borrowings at January 28, 1994 and January 29, 1993, respectively, have been classified as long-term debt. The carrying value of these borrowings is a reasonable estimate of fair value since interest rates are based on prevailing market rates. NOTE 3 - NOTES AND DEBENTURES PAYABLE: Consolidated notes and debentures payable consist of the following (in thousands): January 28, January 29, 1994 1993 7% Convertible Subordinated Debentures, due 2011 $ 22,960 $ 22,960 Bank Notes: Unsecured revolving notes under $100,000,000 credit agreement, payable April 30, 1996, fluctuating interest (3.4% to 3.5% at January 28, 1994) 45,375 - Unsecured revolving note under $5,000,000 credit agreement, payable May 3, 1993, fluctuating interest (4.4% at January 29, 1993) - 4,000 9.00% unsecured promissory note payable $500,000 annually through September 30, 1995, plus interest - 1,500 12.375% unsecured promissory note payable $1,000,000 annually through November 1, 1993, plus interest - 1,000 Short-term instruments classified as long-term debt (see Note 2) 26,500 47,907 Mortgage and equipment notes payable monthly of approx- imately $18,000, including interest at 5% to 10%, maturities through 1999, collateralized by real property and equipment carried at approximately $964,000 at January 28, 1994 705 1,123 95,540 78,490 Less current portion (173) (1,754) $ 95,367 $ 76,736 The 7% convertible subordinated debentures may be converted at any time prior to maturity or redemption into shares of common stock of the Company at a conversion price of $21.17 per share, subject to adjustment under certain conditions. Except in limited circumstances, the debentures are redeemable at the option of the Company at any time after April 30, 1989, initially at 108% of principal and decreasing annually thereafter to 100% on and after May 1, 1994 (see Note 11). Annual sinking fund payments commencing May 1, 2001 are calculated to retire 75% of the debentures prior to maturity. At January 29, 1993, the Company had revolving credit and term note agreements with three banks which permitted the Company to borrow up to $45,000,000 (subject to borrowing limitations) of which $4,000,000 was outstanding under the term note agreements. A $30,000,000 revolving credit agreement backed commercial paper. On various dates from May, 1993 through September, 1993 the notes generally became convertible to term notes payable over three years, with interest rates based on various money market rates. These agreements were replaced during fiscal 1994 by the revolving credit and line of credit agreement discussed below. During fiscal 1994, the Company entered into a revolving credit and line of credit agreement with a group of banks, which permits the Company to borrow up to $100,000,000 (subject to borrowing limitations discussed below) - $75,000,000 long-term, expiring April 30, 1996, and $25,000,000 line of credit convertible to term note due two years from conversion date. The $25,000,000 line of credit backs commercial paper. The agreement supports the classification of certain notes maturing within one year as long-term debt at January 28, 1994 and January 29, 1993. 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 $75,000,000 and a maximum ratio of senior funded debt to total capital, as defined, of .45 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 $4,490,000 is available at January 28, 1994 for payment of dividends. Maturities of long-term notes and debentures for each of the five years subsequent to January 28, 1994 and in the aggregate are as follows (in thousands): Fiscal Years Ending 1995 $ 173 1996 431 1997 71,908 1998 36 1999 24 Later years 22,968 $ 95,540 - ------------------------------------------------------------------------------- 1994 ANNUAL REPORT - PAGE 20 NOTE 4 - INCOME TAXES: In fiscal year 1992, the Company adopted Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes. Under the provisions of SFAS No. 109, the Company elected not to restate prior years and has determined that the cumulative effect of implementation was immaterial. The effect of this change on fiscal 1992's financial statement was to decrease the net loss by approximately $450,000 ($.10 per share). The components of the net deferred tax asset recognized in the accompanying balance sheets are as follows (in thousands): January 28, January 29, 1994 1993 Deferred tax asset $7,514 $6,903 Deferred tax liability (188) (333) Valuation allowance (144) (175) $7,182 $6,395 The types of temporary differences between the tax bases of assets and liabilities and their financial reporting amounts that give rise to the deferred tax liability and deferred tax asset and their approximate tax effects are as follows (in thousands): January 28, January 29, 1994 1993 Depreciation $ 374 $ 142 Capital leases 646 703 Allowance for doubtful accounts 1,529 1,229 Inventory (net) 1,435 1,366 Accrued vacation 471 437 Environmental clean up costs 183 191 Deferred compensation 447 469 Other accrued expenses 2,179 1,715 Other (82) 143 $7,182 $6,395 The consolidated provision for income taxes consists of the following (in thousands): Fiscal Years Ended January 28, January 29, January 31, 1994 1993 1992 Currently payable: Federal $ 4,433 $ 2,998 $ (40) State 626 436 173 5,059 3,434 133 Deferred: Federal (978) (1,415) (1,774) State 191 (481) (323) (787) (1,896) (2,097) $ 4,272 $ 1,538 $ (1,964) The following is a reconciliation of tax computed at the statutory Federal rate to the income tax expense in the statements of operations (dollars in thousands): Fiscal Years Ended January 28, January 29, January 31, 1994 1993 1992 Amount % Amount % Amount % Tax com- puted at statutory Federal rate $ 3,695 35.0 $ 1,365 34.0 $(1,980) (34.0) Effect of: State income tax,net of Federal income tax benefit 531 5.0 (30) (.7) (99) (1.7) Nonde- ductible amorti- zation of purchase adjust- ments 24 .2 14 .3 21 .4 Nonde- ductible expenses 117 1.1 103 2.6 92 1.6 Other, net (95) (.8) 86 2.1 2 - Income tax expense (benefit) $ 4,272 40.5 $ 1,538 38.3 $(1,964) (33.7) As of January 28, 1994, the Company had operating loss carryforwards for state and Federal income tax purposes of approximately $2,000,000 and $400,000, respectively, which will expire in the years 1999-2007. NOTE 5 - 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. Amounts charged to expense for these plans during the fiscal years ended in 1994, 1993 and 1992 were $1,000,000, $405,000 and $460,000, respectively. - ------------------------------------------------------------------------------- 1994 ANNUAL REPORT - PAGE 21 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 $533,000, $263,000 and $50,000 for the fiscal years ended in 1994, 1993 and 1992, 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 1,560,000 shares of common stock to key executive, management, and sales employees, and, with respect to 60,000 shares, to 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. 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 is reflected in income based upon the market value of the stock. There were no SARs granted or exercised during the three-year period ended January 28, 1994. A summary of option transactions during each of the three fiscal years in the period ended January 28, 1994 is shown below: Number of Option Price Shares Range Under option, January 25, 1991 (all exercisable) 288,550 $12.25-$19.33 Granted 297,000 $12.63 Exercised (1,365) $12.25 Cancelled (161,449) $12.25-$16.08 Under option, January 31, 1992 (194,736 shares exercisable) 422,736 $12.25-$19.33 Granted 20,000 $12.00-$12.87 Exercised - - Cancelled (36,294) $12.25-$19.33 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 $12.00-$17.63 There were 755,658 and 754,823 shares available for the granting of options at January 28, 1994 and January 29, 1993, respectively. 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 $166,000, $158,000 and $155,000 in fiscal 1994, 1993 and 1992, respectively. NOTE 6 - 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 $1,165,000, $1,165,000 and $1,153,000 for the fiscal years ended in 1994, 1993 and 1992, respectively. Leased properties under capital leases are included in the balance sheets as follows (in thousands): January 28, January 29, 1994 1993 Leased property under capital leases (consisting of land and buildings) $10,794 $10,794 Accumulated amortization (7,864) (7,270) $ 2,930 $ 3,524 In addition, rents under operating leases paid to this related corporation were $396,000, $399,000 and $145,000 in 1994, 1993 and 1992, respectively. 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 28, 1994, are as follows (in thousands): Capital Operating Fiscal Years Ending Leases Leases 1995 $ 1,165 $ 5,524 1996 1,165 2,969 1997 1,165 2,209 1998 1,165 1,833 1999 562 1,444 Later years 945 2,199 Total minimum lease payments 6,167 $16,178 Less amount representing interest (1,583) Present value of net minimum lease payments 4,584 Less current portion (725) $ 3,859 - ------------------------------------------------------------------------------- 1994 ANNUAL REPORT - PAGE 22 Lease-related expenses are as follows (in thousands): Fiscal Years Ended January 28, January 29, January 31, 1994 1993 1992 Capital lease amortization $ 594 $ 594 $ 594 Capital lease interest expense $ 505 $ 564 $ 603 Operating lease rentals (excluding month-to- month rents) $5,872 $5,210 $3,875 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 fiscal 1991 sale of its manufacturing operations. As partial consideration for the sale, the Company received $2,750,000 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 has guaranteed $1,750,000 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 $360,000 as of January 28, 1994. NOTE 7 - 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 8 - CONCENTRATION OF CREDIT RISK: The Company sells its products in the major areas of construction markets throughout the Southeastern 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 the Southeast; 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 2% 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. NOTE 9 - BUSINESS COMBINATIONS: On June 30, 1993, the Company acquired all the common stock of Electrical Distributors, Inc. ("EDI") in exchange for 374,998 shares of the Company's common stock. EDI is a wholesale distributor of electrical products with one outlet in Georgia. The transaction has been accounted for as a pooling of interests and, accordingly, the consolidated financial statements for all periods presented have been restated to include the accounts of EDI. EDI's fiscal year end has been changed from April 30 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 acquisition were (in thousands): Hughes Supply, Inc. EDI Combined Three months ended April 30, 1993 (unaudited): Net sales $141,636 $ 6,878 $148,514 Net income 648 51 699 Fiscal year ended January 29, 1993: Net sales 528,363 27,433 555,796 Net income 2,264 214 2,478 Fiscal year ended January 31, 1992: Net sales 481,001 28,191 509,192 Net income (loss) (4,040) 181 (3,859) During fiscal year 1994, the Company acquired several wholesale distributors of materials to the construction industry. One acquisition was treated as an immaterial pooling while the other acquisitions 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. - ------------------------------------------------------------------------------- 1994 ANNUAL REPORT - PAGE 23 NOTE 10 - SUPPLEMENTAL CASH FLOWS INFORMATION: The following is a reconciliation of net income (loss) to net cash provided by (used in) operating activities (in thousands):
Fiscal Years Ended January 28, January 29, January 31, 1994 1993 1992 Net income (loss) $ 6,286 $ 2,478 $ (3,859) Adjustments to reconcile net income(loss) to net cash provided by (used in) operating activities: Depreciation 6,703 5,863 6,084 Amortization 762 773 1,065 Provision for doubtful accounts 1,671 1,775 2,542 (Gain) loss on sale of property, plant and equipment (264) (1,012) 284 Undistributed (earnings) losses of affiliate (171) (135) 131 Write-off of goodwill - - 468 Changes in assets and liabilities net of effects of business acquisitions: (Increase) decrease in: Accounts receivable (16,824) (9,499) (5,789) Inventories (4,209) 60 4,319 Refundable income taxes - 530 1,571 Other current assets (97) (1,195) 296 Other assets 178 31 154 Increase (decrease) in: Accounts payable and accrued expenses 4,704 7,473 5,227 Accrued interest and income taxes (461) 1,112 (107) Other noncurrent liabilities 178 158 - Increase in deferred income taxes (711) (1,896) (2,097) Net cash provided by (used in) operating activities $ (2,255) $ 6,516 $ 10,289
NOTE 11 - SUBSEQUENT EVENT: On March 8, 1994, the Company issued a call for redemption or conversion of the outstanding 7% convertible debentures (see Note 3). On April 7, 1994, any debentures outstanding will be redeemed by the Company at 101% of the principal amount, plus accrued and unpaid interest to the redemption date. If the Company had called the redemption of the debentures on January 30, 1993 and if all the debentures had been converted to common stock, primary earnings per share for fiscal year 1994 would have been $1.27. Fully diluted earnings per share for fiscal 1994 already assumes the conversion of the debentures. REPORT OF INDEPENDENT ACCOUNTANTS Shareholders and Board of Directors Hughes Supply, Inc. We have audited the accompanying consolidated balance sheets of Hughes Supply, Inc. and subsidiaries as of January 28, 1994 and January 29, 1993, and the related consolidated statements of operations, shareholders' equity, and cash flows for each of the three years in the period ended January 28, 1994. 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, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Hughes Supply, Inc. and subsidiaries as of January 28, 1994 and January 29, 1993, and the consolidated results of their operations and their cash flows for each of the three years in the period ended January 28, 1994, in conformity with generally accepted accounting principles. As discussed in Note 4 to the financial statements, the Company changed its method of accounting for income taxes in the period ended January 31, 1992. /s/ Coopers & Lybrand Orlando, Florida March 17, 1994 - ------------------------------------------------------------------------------- 1994 ANNUAL REPORT - PAGE 24 Management's Discussion and Analysis of Financial Condition and Results of Operations Sales Net sales for fiscal 1994 were $660.9 million, a 19% increase over last year's net sales of $555.8 million. Newly-opened and acquired branches accounted for approximately $17 million or 16% of the increase in sales. Sales for Electrical Distributors, Inc., ("EDI"), acquired June 1993, were approximately $30 million and $27 million in fiscal years 1994 and 1993, respectively, and are included in the consolidated sales of the Company because the acquisition of EDI was accounted for as a pooling of interests (see Note 9 of the Notes to the Consolidated Financial Statements). The residential construction markets were more active during fiscal 1994 as compared to the prior two years. The markets were driven by a favorable interest rate environment, improved consumer confidence and the affordability of housing. Overall market activity was up 10-12% in most of the major markets served by the Company. Approximately 80% of the Company's sales increase resulted from increasing its market share. The Company anticipates the overall construction markets to continue to improve during fiscal 1995 as commercial construction markets start to rebound. During fiscal 1993, the Company generated sales of $555.8 million, a 9.2% increase over fiscal year 1992. Existing operations accounted for approximately 80% of the growth in sales with newly-opened branches producing the other 20%. Overall construction activity in the market remained flat. The increased sales volume was achieved, despite a depressed construction market, through gains in market share. Hurricane Andrew, and the resulting rebuilding effort in South Florida, had a positive but minimal impact on the Company's operations. Gross Margin The gross margin for fiscal 1994 was 19.9%. The Company's recent investment in a computerized management information system, has contributed to the Company's economies of purchasing and inventory management and has provided greater control over pricing and margins. This favorable impact was somewhat offset by continued competitive conditions in the marketplace. In fiscal 1993, the gross margin remained the same as the fiscal 1992 level of 19.5%. This resulted from increased competition in down markets and the Company's efforts to gain market share. Operating Expenses In fiscal 1994, operating expenses were $118.9 million, a 15.2% increase over the prior year. Newly-opened and acquired branches accounted for approximately 20% of the increase in operating costs. The majority of the increase was in personnel costs essential to support the growth in the Company's operations. As a percentage of sales, the Company lowered its operating expenses in fiscal 1994 to 18.0% from 18.6% and 19.8% in fiscal 1993 and 1992, respectively. This resulted from the Company's tight control of operating costs as revenues increased. Management believes additional operating leverage is possible as it continues to install its management information system into remaining operations not currently on the system and by the elimination and centralization of certain administrative functions. Operating expenses for fiscal 1993 were $103.2 million, a 2.4% increase over the prior year. The $500,000 decrease in depreciation and amortization (due to greater use of leased versus owned equipment) and the $800,000 decrease in bad debt expenses (due to better collection experience) were partially offset by increased selling, general and administrative expenses attributable to the inclusion of newly-opened branches for a portion of the year. In fiscal 1992, the Company accrued approximately $675,000 as an operating expense for estimated future costs of removing underground fuel tanks and environmental clean-up. Federal, state and local laws and regulations govern the Company's operation of underground fuel storage tanks. Rather than incur additional costs to restore and upgrade tanks as required by regulations, management opted to remove the existing tanks. The Company has removed these tanks and has identified certain tanks with leaks which will require remedial cleanups. The Company does not expect additional material expenses in future years associated with fuel storage tanks. Non-Operating Income and Expenses Interest and other investment income for fiscal 1994, fiscal 1993 and fiscal 1992 remained constant totaling $1.9 million in each year. The majority of interest income is generated by the collection of service charge income. Interest expense decreased in fiscal 1994 to $4.6 million, down $150,000 from the prior year, due to lower interest rates even though borrowing levels were higher. Interest expense in fiscal 1993 was lower by $1.2 million compared to the prior year, due to lower borrowing rates on approximately the same level of debt. In fiscal 1994, other net non-operating income was $988,000, compared to $1.7 million in fiscal 1993 and $56,000 in fiscal 1992. The decrease in other income in fiscal 1994 versus the prior year is the result of decreased gains realized on the sale of fixed assets, approximately $300,000 versus approximately $1.0 million in fiscal 1993. The fiscal year 1993 amount includes approximately $1.0 million gain on the sale of transportation equipment compared to approximately $350,000 in fiscal 1992. Income Taxes The effective tax rate in fiscal 1994 was 40.5% compared to 38.3% and (33.7%) in fiscal 1993 and 1992. The variation is due to fluctuations in nondeductible expenses and an increase of 1% in the federal tax rate in fiscal 1994. Federal tax law changes enacted in fiscal 1994 are expected to have minimal negative impact on the Company's future results of operations. - ------------------------------------------------------------------------------- 1994 ANNUAL REPORT - PAGE 25 Liquidity and Capital Resources Working capital in fiscal 1994 amounted to $135.0 million compared to $113.6 million and $110.8 million in fiscal 1993 and 1992. The Company continues to maintain greater than 75% of total assets as current assets. The working capital ratio was 2.97 to 1, 2.84 to 1 and 2.82 to 1 for fiscal years 1994, 1993 and 1992, respectively. In fiscal 1994, net cash used in operating activities was $2.3 million versus net cash provided by operating activities of $6.5 million in fiscal 1993 and $10.3 million in fiscal 1992. The primary drivers in fiscal 1994 were the $97.8 million increase in cash received from customers offset by the $103.1 increase in cash paid to suppliers and employees and by the $3.7 million increase in income taxes paid. The Company typically becomes less liquid during expansionary periods when sales volumes are increasing requiring higher levels of inventories and receivables to support the growth. However, days cost of sales in average inventory in fiscal 1994 improved to 60.86 compared to 68.26 and 76.42 in fiscal 1993 and 1992, respectively. In fiscal 1994, days sales in average receivables improved to 49.85 from 50.05 and 50.54 in the prior two fiscal years, respectively. The net cash used in investing activities for fiscal 1994 increased $4.6 million, to $11.5 million, primarily due to the $4.0 million in business acquisitions. Capital expenditures, excluding business acquisitions decreased $445,000 to $8.3 million. Net cash used in investing activities for fiscal 1993 and 1992 were $6.9 million and $3.9 million, respectively. Capital expenditures for fiscal 1995 are expected to be approximately $13 million. In fiscal 1994, the net cash provided by financing activities was $12.6 million compared to net cash used in financing activities of $3.6 million and $3.4 million in fiscal years 1993 and 1992, respectively. To finance the increase in working capital and recent acquisitions, net borrowings under short term debt arrangements amounted to $16.7 million versus $2.3 million payments under short-term debt arrangements in fiscal 1993. These borrowings in fiscal 1994 were partially offset by an increase of $1.2 million in principal payments on long-term debt over fiscal year 1993. In fiscal 1994, the Company's bank financing consisted primarily of a $100 million unsecured credit facility which includes a $75 million long-term revolving credit facility and a $25 million line of credit convertible to a term note (see Note 2 and Note 3 of the Notes to Consolidated Financial Statements). The Company's financial condition remains strong and the Company has the resources necessary, with approximately $30 million of unused debt capacity (subject to borrowing limitations under long-term debt covenants), to meet future anticipated funding requirements. Inflation and Changing Prices The Company is aware of the potentially adverse effects inflationary pressures may create through higher asset replacement costs and related depreciation, higher interest rates and higher material costs. The Company seeks to minimize these effects through economies of purchasing and inventory management resulting in cost reductions and productivity improvements as well as price increases to maintain reasonable profit margins. Management believes, however, that inflation and changing prices have not significantly affected the Company's operating results or markets in the three most recent fiscal years. Long-Term Outlook The Company believes its construction markets will expand moderately over the next few years. The Company has strategically used acquisitions over many years to diversify from residential new construction into commercial, infrastructure and industrial construction markets as well as into repair and replacement markets. Streamlining of operations during the recent severe cyclical downturn in the construction industry has begun to produce upside leverage for the Company, translating into a sharp upturn in the Company's profitability when sales increase. The wholesale distribution industry, which is highly fragmented, will continue to consolidate. The Company will remain successful if it continues to have the capital to assimilate new acquisitions, can finance its way through business cycles, develop value-added services and leverage its new technologies to improve productivity. Accounts Receivable Turnover Fiscal Year Ended 1992 7.13 1993 7.19 1994 7.22 Inventory Turnover Fiscal Year Ended 1992 4.71 1993 5.27 1994 5.92 NET RECEIVABLES (in thousands) Fiscal Year End 1992 $70,622 1993 $78,346 1994 $97,765 INVENTORY (in thousands) Fiscal Year End 1992 $84,877 1993 $84,817 1994 $94,223 DEBT (in thousands) Fiscal Year End 1992 $86,587 1993 $83,734 1994 $100,124 - ------------------------------------------------------------------------------- 1994 ANNUAL REPORT - PAGE 26 SELECTED FINANCIAL DATA (in thousands, except per share data and ratios)
Fiscal Years Ended (1)(2) 1994 1993 1992 1991 Net sales $ 660,938 $ 555,796 $ 509,192 $ 576,388 Cost of sales $ 529,718 $ 447,373 $ 410,132 $ 463,027 Gross margin 19.9% 19.5% 19.5% 19.7% Selling, general and administrative expenses $ 109,760 $ 94,810 $ 91,114 $ 93,538 % of sales 16.6% 17.1% 17.9% 16.2% Depreciation and amortization $ 7,465 $ 6,636 $ 7,149 $ 9,199 Provision for doubtful accounts $ 1,671 $ 1,775 $ 2,542 $ 2,606 Operating income (loss) $ 12,324 $ 5,202 $ (1,745) $ 8,018 Operating margin 1.9% .9% (.3%) 1.4% Interest and other income $ 2,844 $ 3,574 $ 1,913 $ 4,078 Interest expense $ 4,610 $ 4,760 $ 5,991 $ 8,026 Income (loss) before income taxes $ 10,558 $ 4,016 $ (5,823) $ 4,070 % of sales 1.6% .7% (1.1%) .7% Income taxes (benefits) $ 4,272 $ 1,538 $ (1,964) $ 1,654 Net income (loss) $ 6,286 $ 2,478 $ (3,859) $ 2,416 % of sales 1.0% .4% (.8%) .4% Net income (loss) per share Primary $ 1.35 $ .54 $ (.85) $ .51 Fully diluted $ 1.25 $ .54 $ (.85) $ .51 Average number of shares outstanding Primary 4,649 4,564 4,552 4,731 Fully diluted 5,819 4,592 4,552 4,731 Cash dividends per share $ .16 $ .12 $ .24 $ .36 Long-term debt, less current portion $ 99,226 $ 81,320 $ 76,342 $ 85,626 Shareholders' equity $ 94,427 $ 86,666 $ 84,688 $ 89,548 Total assets $ 263,405 $ 230,738 $ 223,721 $ 226,019 Return on equity (3) 7.3% 2.9% (4.3%) 2.5% Leverage (total assets/shareholders' equity) 2.79 2.66 2.64 2.52 Return on assets (3) 2.7% 1.1% (1.7%) 1.0% Capital expenditures (4) $ 8,257 $ 8,702 $ 4,992 $ 7,172
(1) The Company's fiscal year ends on the last Friday in January. (2) All data adjusted for fiscal 1986 and fiscal 1994 poolings of interest and three-for-two stock split declared May 17, 1988. (3) Ratios based on balance sheet at beginning of year. (4) Excludes capital leases. - ------------------------------------------------------------------------------- 1994 ANNUAL REPORT - PAGE 27
Fiscal Years Ended (1)(2) 1990 1989 1988 1987 1986 1985 1984 $ 557,769 $ 529,306 $ 458,079 $ 372,687 $ 351,832 $ 336,466 $ 276,469 $ 443,914 $ 419,890 $ 362,355 $ 300,141 $ 284,259 $ 271,449 $ 222,390 20.4% 20.7% 20.9% 19.5% 19.2% 19.3% 19.6% $ 86,403 $ 79,538 $ 69,097 $ 52,070 $ 48,385 $ 44,915 $ 37,270 15.5% 15.0% 15.1% 14.0% 13.8% 13.3% 13.5% $ 9,127 $ 8,759 $ 6,742 $ 5,407 $ 4,793 $ 4,278 $ 3,749 $ 2,529 $ 1,370 $ 1,602 $ 541 $ 1,239 $ 1,139 $ 313 $ 15,796 $ 19,749 $ 18,283 $ 14,528 $ 13,156 $ 14,685 $ 12,747 2.8% 3.7% 4.0% 3.9% 3.7% 4.4% 4.6% $ 2,800 $ 3,615 $ 2,575 $ 2,548 $ 1,761 $ 1,589 $ 1,657 $ 7,360 $ 6,628 $ 4,203 $ 3,447 $ 2,623 $ 3,362 $ 3,064 $ 11,236 $ 16,736 $ 16,655 $ 13,629 $ 12,294 $ 12,912 $ 11,340 2.0% 3.2% 3.6% 3.7% 3.5% 3.8% 4.1% $ 4,443 $ 6,456 $ 7,211 $ 6,701 $ 5,589 $ 5,847 $ 5,305 $ 6,793 $ 10,280 $ 9,444 $ 6,928 $ 6,705 $ 7,065 $ 6,035 1.2% 1.9% 2.1% 1.9% 1.9% 2.1% 2.2% $ 1.31 $ 1.95 $ 1.76 $ 1.32 $ 1.25 $ 1.34 $ 1.21 $ 1.24 $ 1.77 $ 1.61 $ 1.24 $ 1.25 $ 1.34 $ 1.21 5,181 5,262 5,376 5,247 5,358 5,268 4,992 6,276 6,372 6,467 6,090 5,358 5,268 4,992 $ .35 $ .31 $ .27 $ .25 $ .21 $ .21 $ .19 $ 82,855 $ 76,122 $ 63,069 $ 36,954 $ 20,908 $ 21,853 $ 23,508 $ 95,411 $ 93,656 $ 85,565 $ 78,826 $ 73,879 $ 68,117 $ 60,894 $ 242,626 $ 230,064 $ 207,618 $ 167,494 $ 139,918 $ 127,671 $ 121,282 7.3% 12.0% 12.0% 9.4% 9.8% 11.6% 15.3% 2.54 2.46 2.43 2.12 1.89 1.87 1.99 3.0% 5.0% 5.6% 5.0% 5.3% 5.8% 6.6% $ 10,749 $ 9,856 $ 15,234 $ 11,318 $ 5,635 $ 7,866 $ 8,577
- ------------------------------------------------------------------------------- 1994 ANNUAL REPORT - PAGE 28 HUGHES SUPPLY, INC. SHAREHOLDER INFORMATION The shares of Hughes Supply, Inc. common stock are traded on the New York Stock Exchange under the symbol "HUG". The approximate number of shareholders of record as of March 14, 1994 was 1,169. A COPY OF THE HUGHES SUPPLY, INC. ANNUAL REPORT ON FORM 10-K AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION WILL BE MADE AVAILABLE WITHOUT CHARGE, UPON WRITTEN REQUEST. REQUESTS SHOULD BE DIRECTED TO: J. Stephen Zepf Treasurer and Chief Financial Officer Hughes Supply, Inc. Post Office Box 2273 Orlando, Florida 32802 TRANSFER AGENT AND REGISTRAR American Stock Transfer & Trust Company 40 Wall Street New York, New York 10005 ANNUAL MEETING Tuesday, May 24, 1994, at 10:00 AM 3rd floor of Park Building Sun Bank Center 200 South Orange Avenue Orlando, Florida 32801 GENERAL COUNSEL Maguire, Voorhis & Wells, P.A. Orlando, Florida AUDITORS Coopers & Lybrand Orlando, Florida DIRECTORS David H. Hughes Chairman of the Board Vincent S. Hughes Russell V. Hughes A. Stewart Hall, Jr. Herman B. McManaway Retired John B. Ellis Retired Robert N. Blackford Attorney, Maguire, Voorhis & Wells, P.A. Clifford M. Hames Retired Donald C. Martin Retired John D. Baker, II President, Florida Rock Industries, Inc. CORPORATE OFFICE LOCATIONS AND SUBSIDIARY EXECUTIVE OFFICERS HUGHES SUPPLY, INC. CORPORATE OFFICE 20 North Orange Avenue Post Office Box 2273 Orlando, Florida 32802 Telephone: 407-841-4755 MILLS & LUPTON SUPPLY COMPANY CORPORATE OFFICE 749 East 12th Street Post Office Box 1639 Chattanooga, Tennessee 37401 Telephone: 615-266-6171 EXECUTIVE OFFICERS: R. Richard Anderson President Harry H. Powell Executive Vice President ONE STOP SUPPLY, INC. CORPORATE OFFICE 1133 Polk Avenue Nashville, Tennessee 32710 Telephone: 615-256-9200 EXECUTIVE OFFICER Peter J. Zabaski President PAINE SUPPLY COMPANY CORPORATE OFFICE 220 One Stop Place Pearl, Mississippi 39208 Telephone: 601-932-5556 EXECUTIVE OFFICER: Kevin S. Walker President PUMP & LIGHTING COMPANY CORPORATE OFFICE 300 East 9th Street Post Office Box 34305 Charlotte, North Carolina 28234 Telephone: 704-377-1583 EXECUTIVE OFFICERS: Harold D. Jordan President Frank W. Rush Executive Vice President USCO, INCORPORATED CORPORATE OFFICE 115 Henderson Street Post Office Box 1160 Monroe, North Carolina 28110 Telephone: 704-289-5406 EXECUTIVE OFFICERS: James C. Plyler, Jr. President Kent Lee Executive Vice President EX-21 6 EXHIBIT 21.1 Exhibit 21.1 Subsidiaries of the Registrant 1) XSMC, Inc. (formerly known as Southern Manufacturing Company) 100% - Owned Subsidiary Incorporated in the State of Florida 2) Carolina Pump & Supply Corp. d/b/a - Pump & Lighting Company 100% - Owned Subsidiary Incorporated in the State of North Carolina 3) USCO Incorporated 100% - Owned Subsidiary Incorporated in the State of North Carolina 4) Paine Supply of Jackson, Inc. 100% - Owned Subsidiary Incorporated in the State of Mississippi 5) Hughes Aviation, Inc. 100% - Owned Subsidiary Incorporated in the State of Florida 6) One Stop Supply, Inc. 100% - Owned Subsidiary Incorporated in the State of Tennessee 7) Mills & Lupton Supply Company 100% - Owned Subsidiary Incorporated in the State of Tennessee 8) Twin-T of the Carolinas, Inc. 100% - Owned Subsidiary Incorporated in the State of North Carolina 9) H Venture Corp. 100% - Owned Subsidiary Incorporated in the State of Florida 10) HHH, Inc. 100% - Owned Subsidiary Incorporated in the State of Delaware 11) HSI Corp. 100% - Owned Subsidiary Incorporated in the State of Delaware 12) Electrical Distributors, Inc. 100% - Owned Subsidiary Incorporated in the State of Georgia 13) Alabama Water Works Supply, Inc. 100% - Owned Subsidiary Incorporated in the State of Alabama 14) Swaim Supply Company, Inc. 100% - Owned Subsidiary Incorporated in the State of North Carolina EX-23 7 EXHIBIT 23.1 EXHIBIT 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS Hughes Supply, Inc. We consent to the incorporation by reference in the Registration Statement Nos. 2-78323, 33-9082, 33-26468 and 33-33701 on Forms S-8 and in Registration Statement No. 33-70112 on Form S-3 of Hughes Supply, Inc., of our report dated March 17, 1994, on our audits of the consolidated financial statements of Hughes Supply, Inc. and subsidiaries as of January 28, 1994 and January 29, 1993 and for each of the three years in the period ended January 28, 1994, which report is included in this Annual Report on Form 10-K. /s/ Coopers & Lybrand Orlando, Florida April 26, 1994 EX-99 8 EXHIBIT 99.1 Exhibit 99.1 LOCATION OF FACILITIES HUGHES SUPPLY, INC. - ------------------- FLORIDA - WHOLESALE FLORIDA - (cont.) Auburndale Sarasota Bradenton Building Materials Cape Coral Plumbing Clearwater Sebring Clermont Tallahassee Daytona Contractor Tools Eaton Park Electrical Ft. Lauderdale Utility Building Materials Tampa Plumbing Building Materials Ft. Myers Plumbing Electrical Water & Sewer Plumbing Tavares Water & Sewer Venice Ft. Pierce West Palm Beach Gainesville Winter Haven Electrical Plumbing ALABAMA - WHOLESALE Inverness Birmingham Jacksonville Dothan Electrical HVAC Plumbing Utility Plumbing & PVF Huntsville Water & Sewer Plumbing & HVAC Kissimmee Water & Sewer Lady Lake Mobile Lakeland Montgomery Leesburg HVAC Marianna Water & Sewer Melbourne Miami GEORGIA - WHOLESALE Naples Albany Ocala Alpharetta Orange City Athens Orlando Atlanta Building Materials Building Materials Electrical Electrical Plumbing Plumbing & HVAC Water & Sewer Brunswick Palm Beach Columbus Panama City Hartsfield Electrical LaGrange Plumbing Macon Pompano Beach Electrical Port Richey Plumbing & HVAC St. Petersburg Marietta Moultrie - -------------------------------------------------------------------------------- LOCATION OF FACILITIES (Continued) GEORGIA - (cont.) CAROLINA PUMP & SUPPLY CORP. Savannah (d/b/a Pump & Lighting Co.) Thomasville ---------------------------- Tifton NORTH CAROLINA - WHOLESALE Electrical Charlotte Plumbing & HVAC Charlotte Water & Sewer Valdosta Fayetteville Electrical Greensboro Plumbing Hickory Kinston SOUTH CAROLINA - WHOLESALE Raleigh Anderson Wilmington Winston Salem FLORIDA - RETAIL SHOWROOMS Lakeland SOUTH CAROLINA - WHOLESALE Macon Charleston Naples Florence Orlando Greer Bathstyle Surfside Beach Lightstyle West Columbia Venice TENNESSEE - WHOLESALE FLORIDA - DISTRIBUTION CENTER Knoxville Orlando GEORGIA - DISTRIBUTION CENTER USCO INCORPORATED College Park -------------------------- NORTH CAROLINA - WHOLESALE Charlotte PAINE SUPPLY OF JACKSON, INC. Durham - ----------------------------- Goldsboro MISSISSIPPI - WHOLESALE Henderson Biloxi High Point Greenville Monroe Greenwood Pinehurst Gulfport Rocky Mount Plumbing Salisbury Refrigeration Statesville Hattiesburg Zebulon Jackson Laurel MARYLAND - WHOLESALE Meridian Capitol Heights Pascagoula Tupelo SOUTH CAROLINA - WHOLESALE Aiken Cheraw Columbia Greenville - -------------------------------------------------------------------------------- LOCATION OF FACILITIES (Continued) USCO INCORPORATED (Cont.) - ------------------------------ VIRGINIA - WHOLESALE Arlington La Crosse Lynchburg NORTH CAROLINA - RETAIL SHOWROOMS Crown Point NORTH CAROLINA - DISTRIBUTION CENTER Monroe ONE STOP SUPPLY, INC. - ----------------------------- TENNESSEE - WHOLESALE Clarksville Cookeville Jackson Memphis Nashville KENTUCKY - WHOLESALE Bowling Green Glasgow MILLS & LUPTON SUPPLY COMPANY - ----------------------------- TENNESSEE - WHOLESALE Chattanooga Cleveland Memphis GEORGIA - WHOLESALE Dalton Macon FLORIDA - WHOLESALE Tallahassee -----END PRIVACY-ENHANCED MESSAGE-----