Home » Hughes Supply Profit Up 35% in Third Quarter
Hughes Supply Profit Up 35% in Third Quarter
November 17, 2005
Hughes Supply Inc., Orlando, FL, reported an increase of 28% in net sales in the third quarter of fiscal year 2006 ended Oct. 31, 2005. Sales for the third quarter were $1,493.5 million, the highest in the company's history, and an increase from $1,167.5 million in the same period last year.
Net income grew 35% to $45.7 million compared with $33.8 million in the previous year's third quarter.
Net sales for the nine months ended Oct. 31 grew 23% to $4,066.2 million, compared with $3,303.4 million last year, with organic sales growth of 11%. For the nine months ended Oct. 31, net income grew 15% to $118.9 million, compared with $103 million last year.
Overall, we are highly encouraged by the strong recovery from the second quarter shortfall, with improved execution in the Plumbing business and strong top-line growth in the MRO business," said President and CEO Tom Morgan.
The Company's third quarter net sales of $1,493.5 million included $127 million of net sales from acquisitions completed within the last fiscal year. Strong third-quarter organic sales growth of 17% reflects 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 approximately 3 percentage points of the company's third quarter organic sales growth of 17%.
The Water & Sewer segment reported record organic sales growth of 27%, attributable to strong demand for residential and municipal projects across all of its regions, particularly in Florida, Georgia, Texas and Arizona. In addition, significant price increases for PVC products, which represent about 20% of sales, contributed approximately 5 percentage points to the organic sales growth, and higher volume of PVC products contributed an additional 5 percentage points to the sales growth.
The Plumbing/HVAC segment reported organic sales growth of 5%, with particular strength in Florida, the Carolinas, Texas and Colorado. The improved sales were primarily due to increased market penetration, improved execution of management initiatives and higher PVC and copper prices.
The Utilities segment reported strong organic sales growth of 15%, its seventh consecutive quarter of double-digit growth, driven by hurricane recovery work, strong alliance contract growth and increased meter sales.
The MRO segment reported strong organic sales growth of 20%, partly attributable to increased sales of HVAC equipment and higher renovation business. In addition, the business is benefiting from improvement in apartment occupancy rates in its larger apartment markets of Houston, Dallas and Atlanta, due to an influx of new tenants from hurricane-affected areas, and is now seeing gains from sales productivity and growth initiatives.
The Electrical segment reported 8% organic sales growth, driven by continued strength in commercial and residential construction in Florida, the Carolinas and Texas, hurricane-related sales, and price increases in PVC and copper products.
The Industrial PVF segment reported strong organic sales growth of 21%, its seventh consecutive quarter of excellent doubt-digit growth. The higher sales were driven by strong demand due to continued strengthening in the oil, gas and petrochemical markets, along with stable prices for nickel-based products.
The Building Materials segment reported organic sales growth of 21%, primarily due to strong market demand in commercial, residential and government construction project work in Florida, Georgia, the Carolinas and Virginia.
Organic sales for the Other category, which includes the Mechanical and Fire Protection businesses, collectively were up 22% in the quarter. The higher sales were driven by growth in the Fire Protection business as a result of strong commercial construction, particularly in California. This was partially offset by decreased Mechanical sales due to non-recurring hurricane-related activity in Florida in the prior year quarter.