HUG Hughes Supply

Hughes Supply Raises First Quarter Sales And Earnings Outlook Stronger Demand, Higher Commodity Prices Expected to Result in First Quarter Earnings Per Share of $0.88 - $0.93 ORLANDO, Fla., April 19 /PRNewswire-FirstCall/ -- Hughes Supply, Inc. , a leading distributor of construction, repair and maintenance- related products, today announced that due to increasingly effective sales and operating programs, a strengthening commercial construction market and higher commodity prices, revenue and earnings for its first quarter ending April 30, 2004 are expected to significantly exceed the company's previously issued guidance. Revenues for the first quarter of fiscal year 2005 are now expected to be in the range of $965 million to $975 million, an increase of 23% to 25%, with estimated same store sales growth of 11% - 13%. Earnings per diluted share is expected to be $0.88 to $0.93, on approximately 30.8 million average shares, compared to $0.51 per diluted share, on approximately 23.1 million average shares, in the prior year's first quarter, an increase of 73% to 82%. A federal tax credit, that will reduce the first quarter's tax rate from 39% to 35% and contribute approximately $0.06 to earnings per share, is included in the revised outlook. Hughes is experiencing stronger sales in most of its businesses due to increased commercial and public sector construction activity and continued strength in the residential construction market. In addition, as a distributor of electrical, plumbing, piping products and building materials, the recent and significant price increases in commodities such as steel, PVC, copper, nickel and lumber, have contributed to higher sales and improved margins over last year's first quarter. The price increases are estimated to account for approximately one-third of Hughes estimated same store sales growth rate in the quarter. Tom Morgan, President and Chief Executive Officer said, "As we indicated early last month, strength in the commercial construction sector and higher commodity prices were expected to favorably impact sales and margins in the first quarter, but we clearly underestimated the magnitude of the impact. Stronger than expected demand, driven in part by our sales and marketing programs, coinciding with a higher pricing environment has resulted in an abnormal quarter that has not been experienced at Hughes in recent years. While this clearly translates into higher margins and earnings, and demonstrates the leverage that can be achieved in a distribution business, we remain cautious regarding the outlook for the remainder of the year," concluded Morgan. Hughes primarily records its cost of goods sold (COGS) on a moving average cost basis. In subsequent quarters, the Company expects its COGS relative to sales will increase as a result of the higher prices, and as previously experienced, commodity price spikes to correct themselves. Therefore, Hughes believes that the first quarter is unusual and is not necessarily sustainable. The Company also remains cautious that construction activity, while clearly higher than a year ago, is inconsistent and may moderate. Hughes currently expects the organic sales growth rate to be approximately 5% during the remainder of fiscal year 2005 and that diluted earnings per share in the remaining three quarters will increase 14% to 19%. Therefore, guidance for the full fiscal year 2005 is raised to revenues ranging from $3,750 million to $3,800 million, an increase of 15% - 17% over the prior year; net income of $95.6 million to $100.1 million, an increase of 66% - 74% over the prior year; and diluted earnings per share of $3.10 to $3.25, an increase of 26% - 32% over the prior year. Hughes will discuss its first quarter earnings and additional segment detail, along with the second quarter outlook, on the Company's first quarter earnings conference call scheduled for May 25, 2004. Hughes will issue its first quarter earnings release on May 25, 2004, after market close and will hold a conference call at 4:30 p.m. Eastern time on that day. This conference call can be accessed via the web at: http://www.hughessupply.com/ by selecting the Investors tab, or via telephone at: 888-283-3870; pass code Hughes; leader Mr. David Bearman, A replay of the conference call will be available on the website until June 25, 2004, or you may dial 800-947-6304; passcode Hughes. About Hughes Supply, Inc. Hughes Supply, Inc., founded in 1928, is one of the nation's largest diversified wholesale distributors of construction, repair and maintenance- related products, with 486 locations in 38 states. Headquartered in Orlando, Florida, Hughes employs approximately 8,400 associates and generates annual revenues of over $3 billion. Hughes is a Fortune 500 company and was named the #2 Most Admired Company in America in the Wholesalers: Diversified Industry segment by Fortune Magazine. For additional information on Hughes, you may visit http://www.hughessupply.com/ Except for historical information, all other information discussed in this news release consists of forward-looking statements under the Private Securities Litigation Reform Act of 1995. When used in this report, the words "believe", "anticipate", "estimate", "expect", "may", "will", "should", "plan", "intend", "project", and similar expressions are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be different from any future results, performance, and achievements expressed or implied by these statements. These risks and uncertainties include, but are not limited to, the strength of the construction market and the general economy, fluctuating commodity prices and unexpected product shortages, competition, success in integrating, and achieving expected profitability from, acquired businesses, reliance on key personnel, overseas movement of manufacturing facilities, delay in implementing operating systems, our fixed cost structure, product purchasing and supply, customer credit policies, and other factors set forth from time to time in filings with the Securities and Exchange Commission. The forward-looking statements included in this news release are made only as of the date of this news release and under section 27A of the Securities Act and section 21E of the Exchange Act. Hughes Supply does not have any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances. AP Archive: http://photoarchive.ap.org PRN Photo Desk, photodesk@prnewswire.com http://www.newscom.com/cgi-bin/prnh/19990803/HUGLOGODATASOURCE: Hughes Supply, Inc. CONTACT: Arleen Llerandi, Director, Investor Relations, Hughes Supply, +1-407-822-2989 Web site: http://www.hughessupply.com/

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