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Hughes Supply Profit Up 35% in 3Q
Diversified distributor Hughes Supply Inc., Orlando, FL, recorded a 23% increase in sales for the fiscal year ended Jan. 31, 2006. Sales were a record $5.44 billion, up from $4.42 billion the previous year.
Organic sales growth was 13%, with double-digit growth reported in five of the seven business segments. Profit grew 23% to $151.7 million compared with $123.7 million the previous year.
For the fourth quarter ended Jan. 31, 2006, sales were $1.37 billion, an increase of 23% from $1.12 billion in the previous year’s fourth quarter. Organic sales growth was 19%, with double-digit growth in six of seven business segments. Profit grew 58% to $32.8 million compared with $20.7 million during the same period last year.
Hughes’ fourth quarter sales included $42.1 million of net sales from the National Construction Products, R.A.M. Pipe & Supply and TVESCO acquisitions completed within the last fiscal year. Organic sales growth of 19% reflected continued strength across the commercial, residential, industrial and infrastructure end markets, along with higher PVC and copper prices. Higher prices were estimated to account for about one-fifth of the company’s fourth quarter organic sales growth.
Segment Sales
The Water & Sewer segment experienced organic sales growth of 31% in the quarter due to increased residential, commercial and municipal projects across all regions, with particular strength in Kentucky, Arkansas, Arizona, Georgia, Nevada and Florida. In addition, significant price increases for PVC products contributed about one-fourth of the organic sales growth in the quarter. (4Q: $361.9M/Annual: $1.4B) 19
The Plumbing/HVAC segment reported organic sales growth of 2% in the quarter. Hughes reported that the Plumbing business remained a challenge as it continues to implement initiatives to strengthen market share and improve margins and the overall cost structure. Organic sales growth for the year was 2%. (4Q: $267.2M/Annual: $1.12B)
The Utilities segment reported strong organic sales growth of 23%, its eighth consecutive quarter of double-digit growth. The sales growth was driven by higher demand in most regions, large project orders for transformers and cable, hurricane recovery work, expanded alliance contracts and increased meter sales. Organic sales growth for the year was 17%. (4Q: $252.9M/Annual: $917.9M)
The MRO segment reported organic sales growth of 22% in the quarter. The growth was primarily attributable to increased sales of HVAC equipment and higher renovation business. Additionally, the MRO business continues to benefit from improvement in apartment occupancy rates across all regions. Organic growth for the year was 10%. (4Q: $113.4M/Annual: $481.6M)
The Electrical segment reported strong 17% organic sales growth due to significant price increases in PVC and copper products, as well as increased commercial and residential construction activity, particularly in Florida, Texas and the Carolinas. Organic sales growth for the year was 7%. (4Q: $132M/Annual: $493.6M)
The Industrial PVF segment reported another strong quarter with organic sales growth of 19%, its eighth consecutive quarter of double-digit growth. The business continued to benefit from the strengthening of the petrochemical market and increased demand for project-related business. Organic sales growth for the year was 28%. (4Q: $116.6M/Annual: $463.7M)
The Building Materials segment reported organic sales growth of 16%. The sales growth was driven by increased commercial and municipal construction activity, primarily in Florida. Organic sales growth for the year was 16%. (4Q: $76.6M/Annual: $301.1M)
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