Hughes' Fourth Quarter Earnings Soar 58%, Sales Up 23%
Net income grew 23% to a record $151.7 million compared to $123.7 million in the previous fiscal year. Net sales of a record $5.44 billion for the fiscal year ended Jan. 31 were also up 23% from $4.42 billion in the previous fiscal year. Organic sales growth was 13%, with double-digit growth reported in five of the seven business segments.
Net income for the fourth quarter grew 58% to $32.8 million compared to $20.7 million in the previous year's fourth quarter, while net sales of $1.37 billion were up 23%. Fourth quarter net 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. Strong fourth quarter organic sales growth of 19% reflected continued strength across the commercial, residential, industrial and infrastructure end markets, and higher PVC and copper prices. Also, the company attributed about one-fifth of the quarter's organic sales growth to higher prices.
Hughes also reported fourth quarter organic sales growth by segment:
- Water & Sewer segment +31%
The wholesaler attributed this to increased residential, commercial and municipal projects across all regions, with particular strength in Kentucky, Arkansas, Arizona, Georgia, Nevada and Florida. Also significant price increases for PVC products contributed about one-fourth of the organic sales growth in the quarter, the company said.<
- Plumbing/HVAC segment +2%
“The plumbing business remains a challenge as we continue to implement initiatives to strengthen market share and improve margins and the overall cost structure,” Hughes said in a statement.
- Utilities segment +23%
This was the eighth consecutive quarter of double-digit growth for this segment. 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.
- MRO segment + 22%
This was primarily attributable to increased sales of HVAC equipment and higher renovation business. The MRO business also continues to benefit from improvement in apartment occupancy rates across all regions.
- Electrical segment +17%
The company said this was 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.
- Industrial PVF segment +19%
Hughes said this was the eighth consecutive quarter of double-digit growth for this segment also. The business continued to benefit from the strengthening of the petrochemical market and increased demand for project-related business.
- Building Materials segment +16%
Sales growth was driven by increased commercial and municipal construction activity, primarily in Florida.
Thanking the company's employees, Tom Morgan, Hughes president/CEO, said that net sales, earnings and all key metrics for the year exceeded original goals and surpassed the extraordinary results of the prior fiscal year. He also referred to the company's success in information systems conversions and upgrades, noting that at year-end, all of Hughes Supply's core businesses were on the Hughes Unified operating platform. The wholesaler was close to completing the conversion to Oracle Financials and had begun upgrading its purchasing system to provide state-of-the-art demand forecasting.