-----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, OU4DmMrDMp0ii4gkrIm420nKcYy44MFTrg3I1kWUjeH1NMLVRzjD2OocjIbN0OHZ YeW8kSDTZdIjZzrvFxShuQ== 0000049029-95-000011.txt : 19950612 0000049029-95-000011.hdr.sgml : 19950612 ACCESSION NUMBER: 0000049029-95-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950430 FILED AS OF DATE: 19950609 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HUGHES SUPPLY INC CENTRAL INDEX KEY: 0000049029 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-ELECTRICAL APPARATUS & EQUIPMENT, WIRING SUPPLIES [5063] IRS NUMBER: 590559446 STATE OF INCORPORATION: FL FISCAL YEAR END: 0125 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08772 FILM NUMBER: 95546065 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-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 30, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from .........to........ Commission File No. 001-08772 HUGHES SUPPLY, INC. Incorporated in the State I.R.S. Employer I.D. of Florida Number 59-0559446 Post Office Box 2273 20 North Orange Avenue, Suite 200 Orlando, Florida 32802 Registrant's Telephone Number, including area code: 407/841-4755 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock Outstanding as of May 16, 1995 $1 Par Value 6,251,920 Page 1 HUGHES SUPPLY, INC. FORM 10-Q Index Page No. Part I. Financial Information Item 1. Financial Statements Consolidated Balance Sheets as of April 30, 1995 and January 27, 1995 3 - 4 Consolidated Statements of Income for the Three Months Ended April 30, 1995 and 1994 5 Consolidated Statements of Cash Flows for the Three Months Ended April 30, 1995 and 1994 6 Notes to Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 - 9 Part II. Other Information Item 6. Exhibits and Reports on Form 8-K 10 - 13 Signatures 14 Index of Exhibits Filed with This Report 15 Page 2 HUGHES SUPPLY, INC. PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets (dollars in thousands) April 30, January 27, 1995 1995 ----------- ------------ (unaudited) ASSETS Current Assets: Cash and cash equivalents $ 1,447 $ 3,192 Accounts receivable, less allowance for losses of $5,362 and $4,787 139,471 122,143 Inventories 123,774 119,686 Deferred income taxes 9,437 8,921 Other current assets 4,966 6,479 --------- --------- Total current assets 279,095 260,421 --------- --------- Property, Plant and Equipment, at cost: Land 13,491 13,360 Buildings and improvements 43,737 41,776 Transportation equipment 19,368 19,409 Furniture, fixtures and equipment 20,312 19,738 Property under capital leases 10,794 10,794 --------- --------- Total 107,702 105,077 Less accumulated depreciation and amortization (53,144) (51,846) --------- --------- Net property, plant and equipment 54,558 53,231 --------- --------- Deferred Income Taxes 2,096 1,999 Other Assets 21,060 13,242 --------- --------- $ 356,809 $ 328,893 ========= ========= The accompanying notes are an integral part of these consolidated financial statements. Page 3 HUGHES SUPPLY, INC. Consolidated Balance Sheets - continued (dollars in thousands) April 30, January 27, 1995 1995 ----------- ----------- (unaudited) LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Current portion of long-term debt $ 1,063 $ 1,019 Accounts payable 85,211 71,563 Accrued compensation and benefits 7,364 9,723 Other current liabilities 17,552 12,795 --------- --------- Total current liabilities 111,190 95,100 --------- --------- Long-Term Debt, less current portion: Notes and subordinated debentures 103,637 97,857 Capital lease obligations 2,782 3,061 --------- --------- Total long-term debt 106,419 100,918 --------- --------- Other Noncurrent Liabilities 1,640 1,540 --------- --------- Total liabilities 219,249 197,558 --------- --------- Shareholders' Equity: Preferred stock - - Common stock-6,320,196 and 6,148,599 shares issued 6,320 6,149 Capital in excess of par value 41,166 37,722 Retained earnings 91,132 89,152 --------- --------- 138,618 133,023 Less treasury stock-68,276 and 108,988 shares, at cost (1,058) (1,688) --------- --------- Total shareholders' equity 137,560 131,335 --------- --------- $ 356,809 $ 328,893 ========= ========= The accompanying notes are an integral part of these consolidated financial statements. Page 4 HUGHES SUPPLY, INC. Consolidated Statements of Income (unaudited) (in thousands, except per share data) Three months ended April 30, 1995 1994 ----------- ----------- Net Sales $ 233,765 $ 183,901 Cost of Sales 186,188 147,500 --------- --------- Gross Profit 47,577 36,401 --------- --------- Operating Expenses: Selling, general and administrative 39,888 30,371 Depreciation and amortization 2,238 2,049 Provision for doubtful accounts 463 685 --------- --------- Total operating expenses 42,589 33,105 --------- --------- Operating Income 4,988 3,296 --------- --------- Non-Operating Income and (Expenses): Interest income 677 556 Interest expense (1,735) (1,135) Other, net 190 187 --------- --------- (868) (392) --------- --------- Income Before Income Taxes 4,120 2,904 Income Taxes 1,669 1,234 --------- --------- Net Income $ 2,451 $ 1,670 ========= ========= Earnings Per Share: Primary $ .39 $ .32 ========= ========= Fully Diluted $ .39 $ .31 ========= ========= Average Shares Outstanding: Primary 6,217 5,245 ========= ========= Fully Diluted 6,223 5,984 ========= ========= Dividends Per Share $ .07 $ .05 ========= ========= The accompanying notes are an integral part of these consolidated financial statements. Page 5 HUGHES SUPPLY, INC. Consolidated Statements of Cash Flows (unaudited) (in thousands) Three months ended April 30, 1995 1994 ----------- -------- Increase (Decrease) in Cash and Cash Equivalents: Cash flows from operating activities: Cash received from customers $ 219,176 $ 181,245 Cash paid to suppliers and employees (216,625) (175,732) Interest received 677 556 Interest paid (1,713) (872) Income taxes paid (627) (784) --------- --------- Net cash provided by operating activities 888 4,413 --------- --------- Cash flows from investing activities: Proceeds from sale of property, plant and equipment 209 173 Capital expenditures (2,829) (2,966) Business acquisitions, net of cash (4,532) - --------- --------- Net cash used in investing activities (7,152) (2,793) --------- --------- Cash flows from financing activities: Net borrowing (payments) under short-term debt arrangements 5,075 (1,566) Principal payments on: Long-term notes (60) (55) Capital lease obligations (199) (181) Proceeds from issuance of common shares under stock option plans 84 517 Purchase of common shares (19) (210) Dividends paid (362) (233) --------- --------- Net cash provided by (used in) financing activities 4,519 (1,728) --------- --------- Net Increase (Decrease) in Cash and Cash Equivalents (1,745) (108) Cash and Cash Equivalents: Beginning of period 3,192 1,078 --------- --------- End of period $ 1,447 $ 970 ========= ========= The accompanying notes are an integral part of these consolidated financial statements. Page 6 HUGHES SUPPLY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (dollars in thousands) 1. In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position as of April 30, 1995 and January 27, 1995, the results of operations and cash flows for the three months ended April 30, 1995 and 1994. 2. During the three months ended April 30, 1995, the Company acquired three wholesale distributors of materials to the construction industry for cash and common stock. These acquisitions have been accounted for as purchases and 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. 3. The following is a reconciliation of net income to net cash provided by (used in) operating activities: Three months ended April 30, 1995 1994 ---------- ---------- Net income $ 2,451 $ 1,670 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation 1,901 1,839 Amortization 337 210 Provision for doubtful accounts 463 685 Gain on sale of property, plant and equipment (134) (116) Undistributed (earnings) losses of affiliate 37 (15) Changes in assets and liabilities, net of effects of acquisitions: (Increase) decrease in: Accounts receivable (14,682) (2,712) Inventories 470 (9,721) Other current assets 1,541 1,475 Other assets (1,074) 386 Increase (decrease) in: Accounts payable and accrued expenses 8,414 9,935 Accrued interest and income taxes 1,677 1,101 Other noncurrent liabilities 100 64 Increase in deferred income taxes (613) (388) ---------- ---------- Net cash provided by operating activities $ 888 $ 4,413 ========== ========== Page 7 HUGHES SUPPLY, INC. PART I. FINANCIAL INFORMATION - continued Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations for the Three Months Ended April 30, 1995 as Compared to the Three Months Ended April 30, 1994 Net sales reached a record $233.8 million for the first quarter ended April 30, 1995, a 27% increase over the prior year. Newly-opened and acquired wholesale outlets accounted for approximately $26 million of the increase in sales. Same store sales were up 13%. Construction markets in the Southeast were strong during the quarter, while mild winter weather conditions in the Midwest favorably impacted sales from that area. The Company continues to expect that construction activity will remain strong during all of fiscal 1996 and its sales will increase. Gross margins for the three months ended April 30, 1995 and 1994 were 20.4% and 19.8%, respectively. The improvement in gross margins is due to heightened construction activity as well as purchasing economies from increased volume. Higher sales and improved gross margin resulted in a 31% increase in gross profit to $47.6 million. Operating expenses as a percentage of net sales were 18.2% and 18.0% for the three months ended April 30, 1995 and 1994, respectively. Operating expenses increased to $42.6 million for the first quarter ended April 30, 1995 from $33.1 million in the prior year's first quarter. Approximately 47% of the increase in operating expenses is attributable to recent acquisitions and newly-opened wholesale outlets. Higher insurance and transportation costs were primarily responsible for operating expenses increasing over expected amounts (due to sales growth) in existing operations. Labor costs associated with new product offerings (i.e. primarily pool supplies) and the seasonality of newly- acquired companies have also contributed to higher operating expenses as a percentage of net sales. As sales of the new products develop and as the newly-acquired companies enter their peak season (second and third quarter), the percentage of operating expenses to net sales should decline. Interest expense increased $.6 million to $1.7 million for the quarter ended April 30, 1995. Higher interest rates were responsible for approximately 85% of the increase. Net income reached a first-quarter record $2.5 million compared to $1.7 million for the prior year first quarter. Fully-diluted earnings per share for the quarter increased to $.39 compared to $.31 in the prior year. Page 8 Liquidity and Capital Resources Working capital at April 30, 1995 amounted to $167.9 million compared to $165.3 million at January 27, 1995. The working capital ratio was 2.51 to 1 and 2.74 to 1 as of April 30, 1995 and January 27, 1995, respectively. Annualized inventory turnover was 6.1 and 6.0 times for the three months ended April 30, 1995 and 1994, respectively. Annualized accounts receivable turnover for these periods was 6.9 and 7.1 times, respectively. The Company typically becomes more leveraged in expansionary periods. Consequently, higher levels of inventories and receivables, trade payables and debt are required to support the growth. Net cash flow provided by operations was $.9 million for the three months ended April 30, 1995 versus $4.4 million in last year's first quarter. The change is primarily due to fluctuations in accounts receivable and inventories, which has resulted from the Company's growth. Cash payments for business acquisitions totaled $4.5 million for the three months ended April 30, 1995. Funding was provided by borrowing under existing credit arrangements. Additionally, approximately 207,000 shares of common stock valued at $4.1 million were issued for the acquisitions. The acquisitions were for wholesale distributors of construction materials, pool equipment and supplies, and water systems with facilities in Pennsylvania, Ohio, Georgia, Alabama and South Carolina. These operations are expected to positively impact results of operations over the remainder of the fiscal year. Expenditures for property and equipment were $2.8 million for the quarter ended April 30, 1995 compared to $3.0 million for the prior year first quarter. It is now estimated that these expenditures will be approximately $10 million for fiscal year 1996. The Company continues to maintain sufficient borrowing capacity to take advantage of growth and business acquisition opportunities. As of April 30, 1995, approximately $34 million is available under its existing credit facilities (subject to borrowing limitations under long-term debt covenants). These resources are sufficient to fund ongoing operating requirements. Future expansion will continue to be financed on a project-by-project basis through additional borrowing or, as circumstances allow, through the issuance of common stock. Page 9 HUGHES SUPPLY, INC. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Filed. (2) Plan of acquisition, reorganization, arrangement, liquidation or succession - not applicable. (3) Articles of incorporation and by-laws. 3.1 Articles of incorporation, as amended, filed as Exhibit 3.1 to Form 10-Q for the quarter ended July 31, 1994. 3.2 Composite By-Laws, as amended, filed as Exhibit 3.2 to Form 10-Q for the quarter ended July 31, 1994. (4) Instruments defining the rights of security holders, including indentures. 4.1 Specimen Stock Certificate representing shares of the Company'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 Resolution Approving and Implementing Shareholder Rights Plan filed as Exhibit 4.4 to Form 8-K dated May 17, 1988. (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 Page 10 (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, as amended, filed as Exhibit 10.4 to Form 10-Q for the quarter ended July 31, 1994. 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. Page 11 10.6 Lease Agreement dated June 30, 1993 between Donald C. Martin and Electrical Distributors, Inc., filed as Exhibit 10.6 to Form 10-K for fiscal year ended January 28, 1994. 10.7 Consulting Agreement dated June 30, 1993 between Hughes Supply, Inc. and Donald C. Martin, filed as Exhibit 10.7 to Form 10-K for fiscal year ended January 28, 1994. 10.8 Written description of senior executives' long-term incentive bonus plan for fiscal year 1996 incorporated by reference to the description of the bonus plan set forth under the caption "Approval of the Stock Award Provisions for Fiscal Year 1996" on pages 26 and 27 of the Registrant's Proxy Statement Annual Meeting of Shareholders To Be Held May 24, 1994. 10.9 Senior Executives' Long-Term Incentive Bonus Plan, including the senior executives' long- term incentive bonus plan for fiscal year 1997 (the "1997 Performance Plan") and the senior executives' long-term incentive bonus plan for fiscal year 1998 (the "1998 Performance Plan") incorporated by reference therein, filed as Exhibit 10.9 to Form 10-K for the fiscal year ended January 27, 1995. 10.10 Lease Agreement dated June 30, 1994 between Donald C. Martin and Electrical Distributors, Inc., filed as Exhibit 10.10 to Form 10-K for the fiscal year ended January 27, 1995. (11) Statement re computation of per share earnings. 11.1 Summary schedule of earnings per share calculations. (15) Letter re unaudited interim financial information - not applicable. (18) Letter re change in accounting principles - not applicable. (19) Report furnished to security holders - not applicable. (22) Published report regarding matters submitted to vote of security holders - not applicable. (23) Consents of experts and counsel - not applicable. (24) Power of attorney - not applicable. Page 12 (27) Financial data schedule. 27.1 Financial Data Schedule (filed electronically only). (99) Additional exhibits - not applicable. (b) Reports on Form 8-K. There were no reports on Form 8-K filed during the quarter ended April 30, 1995. Page 13 HUGHES SUPPLY, INC. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. HUGHES SUPPLY, INC. Date: May 31, 1995 By: /s/ J. Stephen Zepf J. Stephen Zepf, Treasurer, Chief Financial Officer and Chief Accounting Officer Page 14 INDEX OF EXHIBITS FILED WITH THIS REPORT 11.1 Summary schedule of earnings per share calculations. 27.1 Financial Data Schedule (filed electronically only). Page 15 EX-11 2 Exhibit 11.1 HUGHES SUPPLY, INC. SUMMARY SCHEDULE OF EARNINGS PER SHARE CALCULATIONS (in thousands, except per share amounts) Potentially dilutive securities: a) Options for common stock, issued under stock option plan. b) 7% Convertible subordinated debentures, due May 1, 2011.
Three Months Ended April 30, 1995 1994 Line - ---- SHARES ------ 1 Average shares outstanding 6,104 5,057 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 113 188 ---------- ---------- 3 Shares used in calculating Earnings Per Common and Common Equivalent Share 6,217 5,245 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 6 18 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 - 721 ---------- ---------- 6 Shares used in calculating Earnings Per Common Share - Assuming Full Dilution 6,223 5,984 ========== ========== EARNINGS -------- 7 Net income per financial statements, used in calculating Earnings Per Common Share and Earnings Per Common and Common Equivalent Share $ 2,451 $ 1,670 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 - 166 ---------- ---------- 9 Earnings used in calculating Earnings Per Common Share - Assuming Full Dilution $ 2,451 $ 1,836 ========== ========== Three Months Ended April 30, 1995 1994 Line - ---- RESULTING PER SHARE DATA ------------------------ 10 Earnings per common share (Line 7/Line 1) $ .40 $ .33 =========== =========== 11 Earnings per common share and common equivalent share (Line 7/Line 3) $ .39 $ .32 =========== =========== 12 Dilution 2.5% 3.0% =========== =========== 13 Earnings per common share - assuming full dilution (Line 9/Line 6) $ .39 $ .31 =========== =========== 14 Dilution (antidilution) 2.5% 6.1% =========== =========== 15 Used in statements of income: [ ] Line 10, if dilution less than 3%, or antidilution, exists for all periods. [ X ] Lines 11 and 13, if dilution >= 3% for any period.
EX-27 3
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET OF HUGHES SUPPLY, INC. AS OF APRIL 30, 1995, AND THE RELATED STATEMENT OF INCOME FOR THE THREE MONTHS THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000049029 HUGHES SUPPLY, INC. 1,000 3-MOS JAN-26-1996 APR-30-1995 1,447 0 144,833 5,362 123,774 279,095 108,752 54,194 356,809 111,190 106,419 6,320 0 0 131,240 356,809 233,765 233,765 186,188 186,188 42,126 463 1,735 4,120 1,669 2,451 0 0 0 2,451 .39 .39
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