Hughes Supply Chalks Up Record Financials

The company posted fourth-quarter net income of $20.7 million, up 120% from $9.4 million in the comparable 2004 period, and revenue of $1.12 billion, up 41% from $796 million a year ago. For the full year, Hughes had net income of $123.7 million, up 114% from last year; and revenue of $4.42 billion, up 36%.

"Strong financial performance, significant progress on operational initiatives, three strategic and accretive acquisitions and a strengthened capital structure made fiscal year 2005 the best year in our company's history," says Hughes president and CEO Tom Morgan.

He projects target ranges for the first quarter of fiscal 2006 which ends April 30, 2005 in these three categories--revenue, $1.24 billion to $1.26 billion, up 24% to 26% with organic sales growth of 7% to 8%; net income of $33 million to $35 million, up 11% to 17%; and diluted earnings per share surfacing at the low end of a range of 50 cents to 53 cents, an increase of 4% to 10%.

In terms of earnings and cash flow, Hughes chief financial officer David Bearman says "despite higher investment spending and increases in certain other expenses, the operating expense ratio improved by 20 basis points to 19.2% over the previous year's fourth quarter." Additionally, Bearman says, "lower interest expense and a lower effective tax rate resulted in a net income return on sales of 1.8%, an improvement of 60 basis points over last year's fourth quarter."

Annual earnings per diluted share grew 59% to $1.95 on 63.4 million shares outstanding, from earnings per diluted share of $1.23 on 47 million shares outstanding in the previous year. Internal return on invested capital improved to over 25% from 16% in the previous year.

The company generated strong operating cash flow of $145.2 million. The quarterly dividend was increased by 30% to 65 cents per share in March 2004.