UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended January 25, 2002
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 001-08772
HUGHES SUPPLY, INC.
(Exact name of registrant as specified in its charter)
Florida 59-0559446
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
20 North Orange Avenue
Suite 200
Orlando, Florida 32801
(Address of principal executive offices)
(407) 841-4755
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock ($1.00 Par Value) New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No |_|
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. |_|
The aggregate market value of the Registrant's voting stock held by
non-affiliates ($41.40 per share): $903,043,255 as of April 19, 2002.
There were 23,850,329 shares of the Registrant's Common Stock ($1.00 par value)
outstanding as of April 19, 2002.
DOCUMENTS INCORPORATED BY REFERENCE
Designated portions of the Annual Report to Shareholders for the fiscal year
ended January 25, 2002 are incorporated by reference in Parts I, II, and IV of
this Report. Designated portions of the Definitive Proxy Statement for the 2002
Annual Meeting of Shareholders are incorporated by reference in Part III of this
Report.
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TABLE OF CONTENTS
Page
----
PART I
Item 1. Business.................................................................. 4
Item 2. Properties................................................................ 13
Item 3. Legal Proceedings......................................................... 13
Item 4. Submission of Matters to a Vote of Security Holders....................... 13
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters..... 14
Item 6. Selected Financial Data................................................... 14
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations....................................... 14
Item 7A. Quantitative and Qualitative Disclosures About Market Risk................ 14
Item 8. Financial Statements and Supplementary Data............................... 14
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure....................................... 14
PART III
Item 10. Directors and Executive Officers of the Registrant........................ 15
Item 11. Executive Compensation ................................................... 15
Item 12. Security Ownership of Certain Beneficial Owners and Management ........... 15
Item 13. Certain Relationships and Related Transactions ........................... 15
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K .......... 16
Signatures................................................................ 23
Index of Exhibits Filed with this Report.................................. 24
Page 3 of 24
PART I
ITEM 1. BUSINESS
FORWARD-LOOKING STATEMENTS
Certain statements set forth in this Report constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Act of 1934, as amended, and are
subject to the safe harbor created by such sections. When used in this Report,
the words "believe," "anticipate," "estimate," "expect," "may," "will,"
"should," "plan," "intend," "potential," "predict," "forecast," and similar
expressions are intended to identify forward-looking statements. Although Hughes
Supply, Inc. (as used throughout this Report, "Hughes Supply," the "Company" or
the "Registrant" refers to Hughes Supply, Inc. and its subsidiaries, except
where the context otherwise requires) believes that the expectations reflected
in such forward-looking statements are reasonable, it can give no assurance that
such expectations will prove to be correct. Actual results or events may differ
significantly from those indicated in such forward-looking statements as a
result of various important factors. These factors are discussed further in the
caption "Risk Factors" below. The Company assumes no obligation to publicly
update or revise its forward-looking statements. The following should be read in
conjunction with the Company's consolidated financial statements and the notes
thereto filed as part of this Report.
GENERAL
Hughes Supply, Inc., founded in 1928, is a diversified wholesale distributor of
construction and industrial materials, equipment, and supplies to commercial
construction, residential construction, industrial and public infrastructure
markets in North America. Operating in 34 states and Mexico, the Company
distributes over 240,000 products, through its 434 branches and six central
distribution centers. The Company's principal customers are electrical,
plumbing, mechanical, fire protection, and underground utility contractors,
electric utility customers, property management and property development
companies, municipalities and government agencies, telecommunication companies,
and industrial companies. Industrial companies include businesses in the
petrochemical, food and beverage, pulp and paper, mining, pharmaceutical, and
marine industries.
The Company's operations are managed in five strategic business units
("Groups"), each of which is led by one of three Group presidents. These Groups
are built around five broad product categories and are: Electrical;
Plumbing/HVAC; Industrial; Building Materials; and Water & Sewer. These Groups
represent the Company's reportable segments and constitute the basis management
uses for making operating decisions and assessing performance. This
product-driven organizational structure is designed to enhance the Company's
competitive position in the marketplace by intensifying the Company's focus on
satisfying customer needs, strengthening vendor relationships, and streamlining
the decision-making processes of the Company. Financial information about the
Company's Groups is set forth in Note 12 of the Notes to Consolidated Financial
Statements of the Company's Annual Report to Shareholders for the fiscal year
ended January 25, 2002, a copy of which is filed as an exhibit to this Report,
and the cited portion of which is incorporated herein by reference.
PRODUCTS
The Company focuses on distributing construction and industrial products that
leverage its strengths in inventory management, specialized sales forces by
product category, distribution and logistics, credit management, and information
technology. The Company has intensified its focus on providing value-added
products and services, including integrated supply arrangements, fabrication,
equipment rental, maintenance and repair, facilities management, and the
development of national accounts.
The Company distributes products and offers services in the following five broad
Groups:
Electrical
The Electrical Group includes the Company's electrical and electric utility
product lines. Markets served include industrial and commercial buildings,
single and multi-family residential, manufacturing plants, underground
utilities,
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electrical substations, power generation facilities, power line construction,
and all types of general construction. The Electrical Group primarily operates
throughout the Midwestern, Southeastern, and Southwestern United States. Key
customers are electrical contractors, industrial companies, schools and
institutions, hospitals, commercial businesses, municipalities, investor-owned
facilities, and co-op and municipal-owned utilities. Products and services
include wire management products, distribution equipment, wire and cable,
automation equipment, tools and fasteners, lamp/lighting controls, energy
products, data/communications products, meter repair and certification, pole
line hardware, and storeroom/job trailer management.
Plumbing/HVAC
The Plumbing/HVAC Group includes the Company's plumbing, HVAC, mechanical pipe,
valves and fittings product lines, and its international business. Markets
served include commercial, institutional, industrial, municipal, single and
multi-family residential, kitchen and bath dealers, building supply, hardware,
and export. The Plumbing/HVAC Group primarily operates throughout the
Midwestern, Southeastern, and Southwestern United States and Mexico. Key
customers are plumbing and HVAC contractors, remodeling contractors, mechanical
contractors, commercial and industrial purchasing agents, municipalities,
fabricators, OEM's, industrial subcontractors, exporters, maintenance
departments, engineering departments, and planners. Products and services in the
Plumbing/HVAC Group include residential and commercial water heaters, furnaces,
heat pumps, air conditioning units, copper, steel, cast iron, poly and PVC pipe
and fittings, plumbing fixtures, faucets and accessories, pumps and sprinkler
heads, commercial drains, mechanical valves, repair parts, and procurement
services.
Industrial
The Industrial Group includes the Company's industrial pipe, plate, valves, and
fittings product lines. Markets served include special purpose piping systems
(requiring exotic alloy pipe, nickel or composite), manufacturing facilities,
marine applications, flow control processing systems (high temperature and high
corrosive types of fluids), process plants, phosphate, chemical, utility, pulp
and paper, pharmaceutical, export, citrus, food and dairy, solid waste,
engineering, commercial, institutional, and municipal. The Industrial Group
primarily operates throughout the Southeastern and Southwestern United States.
Key customers are industrial and mechanical contractors, fabricators, wholesale
distributors, exporters, OEMs, and industrial concerns (food and beverage, pulp
and paper, mining, petro-chemical, marine, pharmaceutical, etc.). Products in
the Industrial Group include valves, fittings, pressure fittings, angle,
flanges, plate, sheet, pipe (i.e. carbon, stainless and thermoplastic, etc.),
tubing and bar, steam traps, actuators, valve positioners, and gauges. Services
provided include valve automation and repair, piping fabrication, and pipe
cutting and grooving.
Building Materials
The Building Materials Group includes the Company's building materials and
maintenance supplies product lines. This Group primarily operates in the
Southeastern United States. The building materials product line focuses on the
construction of roads and bridges along with commercial, industrial,
multi-family and infrastructure projects. Key customers of the building
materials product line are concrete, masonry caulking/waterproofing, and road
and bridge contractors and subcontractors. Products and services in the building
materials product line include concrete and masonry supplies and accessories,
lumber, bridge rail, overhand brackets, erosion control products, bearing pads,
tilt-up bracing rental and lifting/bracing inserts, sealants, waterproofing and
fireproofing materials, commercial washroom specialties, tools, and accessories.
The maintenance supplies product line serves the multi-family housing market
with after-market rehab and maintenance supplies, including plumbing,
electrical, appliances/parts, hardware, door/window parts, HVAC equipment/parts,
and janitorial supplies. Key customers for the maintenance supplies product line
are property management and property development firms, and apartment
owner/operated properties.
Water & Sewer
The Water & Sewer Group includes the Company's water and sewer, concrete, and
fire protection product lines. This Group primarily operates throughout the
Midwestern, Southeastern, Southwestern, and Western United States. The water and
sewer and concrete product lines primarily serve the Company's infrastructure
market through customers such as underground utility contractors, utility
companies, telecommunication companies, site developers, municipalities, and
government agencies. The fire protection product line serves fire protection
contractors in the commercial construction,
Page 5 of 24
residential construction, and industrial markets. Products and services in the
Water & Sewer product category include all piping products (ductile iron, PVC,
HDPE, and steel, etc.), fire hydrants, valves, fittings, storm drains, backflow
prevention devices, water meters, leak detection, irrigation products, pumps,
tanks, manhole rehab services, concrete sewer products, concrete electrical and
telephone vaults, fire protection products (including sprinkler heads, steel
pipe and fittings), and fire protection fabrication services.
CUSTOMERS
The Company currently serves over 75,000 customers, and no single customer
accounts for more than 2% of total annual sales. Unlike do-it-yourself home
center retailers, the Company does not market its products to retail consumers.
Consequently, the Company differentiates itself with respect to its customer
base, breadth of products offered, and level of service provided. Management
believes that the Company's customers are typically professionals who choose
their vendors primarily on the basis of product availability, price,
relationships with sales personnel, and the quality and scope of services
offered by such suppliers. Furthermore, professional customers generally buy in
large volumes, are repeat buyers because of their involvement in longer-term
projects, and require specialized services not typically provided by
do-it-yourself home center retailers. The Company provides its customers with
credit services, design assistance, material specifications, scheduled job site
delivery, job site visits to ensure satisfaction, technical product services
(including blueprint take-off and computerized order quotes), and assistance
with product returns. Accordingly, the Company has been able to serve customer
groups that do-it-yourself home center retailers generally do not emphasize.
VENDORS
The Company purchases from over 13,000 manufacturers and vendors, of which
approximately 700 are part of the Company's Preferred Vendor Program. This
Preferred Vendor Program leverages the Company's existing relationships with a
number of vendors and helps to increase sales of their products in local markets
through various initiatives, including sales promotions, cooperative marketing
efforts, dedicated sales force, and product exclusivity. In return, many of
these key vendors offer lower prices and volume incentive programs to the
Company. The Company actively solicits volume-purchasing discounts and rebates
from its preferred vendors and is constantly working to consolidate its
Preferred Vendor Program. This program has reduced the number of vendors and has
resulted in stronger, more strategic relationships with a more concentrated
group of vendors. The concentration of vendors has also improved the Company's
ability to ensure more timely delivery, to reduce errors, and to obtain better
terms and greater financial incentives. To strengthen relations with its
vendors, the Company created a centralized Vendor Development Department during
fiscal 2002. This department is solely attentive to fostering and examining the
communications and agreements with the Company's vendors. In addition, the
Company has a freight management program, with similar goals of reducing its
number of freight vendors and controlling the cost of inbound and outbound
freight. Other programs currently being implemented with vendors include
vendor-managed inventory systems, bar coding, and electronic exchange of
purchase orders and invoices. No single vendor accounted for more than 5% of the
Company's total purchases during fiscal 2002.
DISTRIBUTION AND LOGISTICS
The Company's distribution network consists of 434 branches and six central
distribution centers in the United States and Mexico. The efficient operation of
the Company's distribution network is critical in providing quality service to
the Company's customer base. The Company's central distribution centers and
branches use technology in warehouse management to optimize receiving, inventory
control, picking, packing, and shipping functions. The Company's purchasing
agents in its branches use a computerized inventory system to monitor stock
levels, while central distribution centers in Arizona, Florida, Georgia, North
Carolina, and Texas provide purchasing assistance as well as a broad stock of
inventory which supplements the inventory of the branches. In addition, the
Company uses several of its larger branches in other parts of the country as
distribution points for certain product lines.
The substantial majority of customer orders are shipped from inventory at the
Company's branches. The Company also accommodates special orders from its
customers and facilitates the shipment of certain large volume orders directly
from the manufacturer to the customer. Orders for larger construction projects
normally require long-term delivery schedules throughout the period of
construction, which in some cases may continue for several years.
Page 6 of 24
SALES AND MARKETING
The Company employs a specialized and experienced sales force for each of its
product lines, including approximately 950 outside sales representatives who
call on and work with professional buyers for contractors and subcontractors.
They provide product specifications and usage data, design alternatives, and job
quotes in an effort to assist them in fulfilling their material needs.
Approximately 700 inside account associates expedite orders, deliveries,
quotations, requests for pricing, and the release of products for delivery.
A re-emphasis on sales training has occurred within Hughes Supply. During fiscal
2002, the Company began and completed formal classroom training nationwide to
target specific sales skills to its outside sales force. In addition, the new
Hughes Persuasive Selling model was introduced to its outside sales force.
Similarly, Hughes plans to establish new formal training for its inside sales
force.
The Sales and Marketing Department offers the sales force the tools they need to
communicate the benefits of the Company to their customers, prospects, and
business partners. During fiscal 2002, Sales and Marketing introduced the new
Hughes Supply brandmark. It contains both the traditional Hughes Supply shield
shape and a strong presentation of the Hughes Supply name, as well as the new
tagline - Solutions. Supply. Service., to reinforce the Company's position as a
premier diversified industrial distributor.
The Company focuses its sales and marketing efforts on building strong customer
relationships. The Company has developed several new programs, including Hughes
Access, HughesPlus, and the Hughes Customer Adventures Program. All of these
programs are designed to keep existing customers, to build relationships with
new customers, and to identify profitable customers who have not purchased
recently from the Company.
The innovative Hughes Access program presents special value promotions to
customers from select Hughes Supply vendors. In essence, the Company partners
with top vendors in each product line and provides Hughes' customers with
exclusive limited-time offers. Under the HughesPlus program, the Company
leverages its buying power to benefit customers. The Company offers its
customers special buying privileges from well-known national firms. This
preferred pricing is on items that range from office products to capital
financing. The Hughes Customer Adventures program is a way for the Company to
reward its best customers with a trip of their choice when they exceed a
specified purchase volume. The trip options include, among others, exotic
hunting and fishing expeditions, photo safaris, and skiing. The Company also
created a national accounts program and established a government sales division
to more effectively secure bids on local, state, and national levels.
INFORMATION TECHNOLOGY
The Company's IT systems are capable of supporting numerous operational
functions including purchasing, receiving, order processing, shipping, inventory
management, sales analysis, and accounting. The Company's customers and sales
representatives rely on these systems for real-time information on product
pricing, inventory availability, and order status. The systems also provide
management with information relating to sales, inventory levels and customer
payments, and with other data that is essential for the Company to operate
efficiently and provide a high level of service to its customers. The Company
believes that its continued investment in upgrading and consolidating its IT
systems is necessary to provide a platform to implement its e-commerce
initiatives and to allow it to continue its strategic growth initiatives.
In fiscal 2001, the Company selected a new distribution/logistics software
provider. This integrated software is an e-commerce enabled, customer
fulfillment, inventory management, logistics, and distribution management
system. It is designed specifically for MRO- and contractor-oriented
distributors. The Company began implementing this software in December 2001 and
expects implementation to be staggered over approximately a two-year period. The
Company believes that this timeframe will enable it to reduce risk, minimize
customer disruption, and spread implementation costs. Once implementation is
complete, the Company expects to be operating primarily under one platform,
compared to its 26 current operating systems. The Company believes that
consolidation of its operating systems allows for increased operational
efficiencies, particularly in the area of working capital management, provides a
means for decreasing transaction costs, and provides the Company with the
infrastructure necessary to realize administrative synergies associated with
past and future business acquisitions.
Page 7 of 24
The Company is significantly expanding its electronic data interchange (EDI)
presence, particularly with vendors, and the new operating system being
implemented will help facilitate this process.
OPERATING STRATEGY
The Company's operating strategy is based on decentralizing, at the branch
level, customer-related functions such as sales and local inventory management.
The administrative responsibilities for certain functions such as credit, human
resources, finance and accounting, legal, and information technology are
centralized at the corporate level. In addition, the Company has re-centralized
its Operations Department and created a new Inventory Management Department in
fiscal 2002. These departments are responsible for streamlining and implementing
improved operational processes within the Company and managing inventory levels,
focusing specifically on excess inventory. All operating branches are assigned
to one of the Company's five Groups, each of which is led by one of three Group
presidents. Under this structure, the Company's branches are grouped into
territories, territories into districts, districts into regions, and regions
into Groups. Territory managers generally have oversight responsibility for
branches within a territory as well as direct responsibility for a specific
branch within the territory. District managers have responsibility over certain
groups of branches but do not have direct responsibility for a specific branch.
District and territory managers report to regional managers. Regional managers
report to the Group presidents. Management believes its organizational structure
is designed to enhance the Company's competitive position in the marketplace by
intensifying the Company's focus on satisfying customer needs, strengthening
vendor relationships, and streamlining the decision-making processes of the
Company. Key elements of the Company's operating strategy include:
Local Market Focus
Hughes Supply has organized its branches as autonomous, decentralized branches
capable of meeting local market needs and offering competitive prices. Each
branch handles one or more of the Company's product lines and operates as a
separate profit center with its own specialized and experienced sales force.
Each branch manager has the authority and responsibility to set pricing and
tailor the inventory offering and mix (as well as the nature of services
offered) in order to meet the local market demand. In addition, each branch
manager is responsible for purchasing, maintaining adequate inventory levels,
cost control, and customer relations. A substantial portion of a branch
manager's compensation is dependent on their branch's financial performance. The
Company has been able to tailor its branch size and product offerings to meet
perceived market demand. As a result, the Company successfully operates branches
in secondary cities where management believes it has achieved significant market
share and in larger metropolitan areas where it has established a sound market
presence.
Superior Customer Service
Substantially all of Hughes Supply's sales are to professional customers with
whom the Company has developed long-term relationships. These relationships are
based on the Company's history of providing superior service, which in turn
creates trust. Customer services provided by the Company include credit, design
assistance, material specifications, scheduled job site delivery, job site
visits to ensure satisfaction, technical product services (including blueprint
take-off and computerized order quotes), and assistance with product returns.
In addition to the Sales and Marketing Department initiatives discussed above,
the Company has recently introduced the 12 Commitments to Customer Service. The
12 Commitments were developed through discussions with customers about what
measures Hughes Supply must take to gain and maintain business. They are a
compilation of essential principles that every member of the Hughes Supply team
should be guided by on a daily basis. The goal encompassed in every one of the
12 Commitments is for the Company to be the best in customer service in each of
the industries it serves.
Comprehensive and Diversified Product Categories
As part of its emphasis on superior customer service, the Company offers more
than 240,000 products at competitive prices. Distribution of a wide variety of
products within each product category helps the Company's customers manage their
inventory, arrange for consolidated delivery requirements, and purchase a
greater portion of total job specifications. The depth and breadth of the
Company's product categories generally permits it to make add-on sales of higher
margin, non-commodity items. The Company is diversified across multiple product
categories, geographic regions, and various sectors of the construction industry
(such as commercial, residential, public infrastructure and
Page 8 of 24
industrial), which lessens its dependence upon market conditions applicable to
any of its product categories or any single sector of the construction industry.
This product diversification provides opportunities for the Company to
participate in multiple phases of construction projects, capturing more of the
total construction spending dollar and spanning the entire construction cycle.
Well-Trained and Experienced Workforce
The Company has implemented extensive employee recruiting and training programs
to ensure that its employees have the skill levels necessary to compete
effectively in today's marketplace. The Company utilizes in-depth training
seminars covering basic and advanced product knowledge, as well as multiple
levels of selling, purchasing, negotiating, and management skills workshops. The
Company has also developed a recruiting and training program to increase the
number of qualified applicants introduced into its management and sales ranks.
The Company's corporate management, branch managers, outside sales
representatives, and inside sales account associates have considerable
experience with the Company. In fiscal 2002, there has been turnover of certain
corporate management positions, including the appointment of Thomas I. Morgan as
successor President and Chief Operating Officer. Additionally, in fiscal 2002,
the Company created several executive positions, including Senior Vice President
of Sales and Marketing, Senior Vice President of Operations, and Vice President
of Human Resources, to provide new emphasis on these functions.
Centralized Administrative Functions
In fiscal 2001, the Company has re-centralized certain administrative functions
such as credit, human resources and payroll, finance and accounting, legal, and
information technology. Centralization of human resources, finance and
accounting functions ensure conformity in policy and lower costs of
administration. The Company's credit function is essential to its success.
Dedicated credit managers are assigned to specific geographic areas in the
United States. All credit decisions are researched, analyzed, and approved by
the regional credit managers to ensure conformity and quality of credit
decisions across the Company's operations.
GROWTH STRATEGY
Many local and regional distributors are privately-owned, relationship-based
companies. Such distributors often have limited purchasing power, lack
sufficient resources to offer broad product lines and multiple brands, and lack
the sophisticated inventory management and control systems necessary to operate
multiple branches efficiently. As a result, such distributors target their
services to a particular type or size of customer and/or a particular product
category. To counter the limitations experienced by small distributors, certain
wholesale distributors, including the Company, have grown considerably through
acquisitions. This expansion has enabled Hughes Supply to service various sizes
and types of customers with multiple product categories and to diversify its
sales across various types of construction and users of its products. Because of
Hughes Supply's strong competitive position, its size and its management
infrastructure, management believes that the Company is well positioned to
continue to benefit from consolidation trends within the wholesale distribution
business.
Hughes Supply's strategy for growth has focused on both internal growth and
growth through acquisitions. Historically, the Company has centered its internal
growth and growth through acquisitions around customer groups and products which
help it to diversify geographically and product-wise, capturing more of the
total construction dollar while focusing more on products used in repair,
maintenance, replacement, and renovation applications. These products generally
offer higher margins and are less dependent on new construction. Management
believes that the Company's product, market and geographic diversification helps
reduce the impact of economic cycles on its profitability. A summary of the
Company's internal growth and acquisition program follows.
Internal Growth
Over the last five years, Hughes Supply has grown internally through increases
in comparable branch sales and the opening of new branches. Comparable branch
sales increases have been attributable to new product introductions within
existing branches, such as fire protection equipment and concrete fabrication
products, fiber-optic products, and the higher value-added services such as
integrated supply, national account business, and complete warehouse management
contracts. Since January 31, 1997, Hughes Supply has opened 81 new branches
(excluding branches opened and closed within this time period). New branches are
generally opened to fill in existing market areas or to accommodate the split
Page 9 of 24
out of branches handling multiple product lines.
Since January 31, 1997, the Company has closed 45 branches, excluding branches
that were opened and closed within this time period and branches that were sold
as part of the divestiture of its pool and spa business in January 2001. The
Company closed these branches because they did not strategically fit into the
Company's core businesses and/or they did not perform to expectations. During
fiscal 2002, the Company closed or decided to close 43 under-performing
branches, including its e-commerce venture. The Company will continue to
evaluate the operations and performance of its branches over the next fiscal
year.
Acquisitions
Historically, Hughes Supply has pursued an active acquisition strategy to
capitalize on the large, growing and highly-fragmented markets in which it
competes. The Company's acquisition strategy focuses on acquiring profitable,
private, wholesale distribution businesses with strong management teams and
well-developed market positions and customer relationships. Hughes Supply
identifies acquisition targets that present growth opportunities and complement
Hughes Supply's existing structure, allowing the Company to benefit from
synergies resulting from the integration of these targets' operations with its
own. Management believes that significant acquisition opportunities exist in
each of its product categories. Hughes Supply categorizes its acquisitions as
fill-in acquisitions or new market acquisitions.
Fill-in acquisitions represent acquisitions of primarily small companies that
distribute some of the same product lines as the Company in geographic areas
already served by Hughes Supply. Since January 31, 1997, the Company has added
25 branches through the completion of 12 fill-in acquisitions. The Company's
management believes that significant additional fill-in acquisition
opportunities are available.
New market acquisitions represent the addition of new product lines, primarily
within the Company's existing product categories, or the entry into new
geographic markets, or both. The Company's principal acquisition criteria with
respect to new market acquisitions has been to:
o add products and product lines with higher gross margins;
o increase sales to the replacement and industrial markets (that tend to
be less cyclical than new construction markets);
o achieve greater geographical diversification;
o develop additional opportunities for future fill-in acquisitions and
new branch openings; and
o expand its current product offering from leading suppliers.
Since January 31, 1997, the Company has completed 26 new market acquisitions
representing 131 branches, including the acquisition of Water Works Sales
Companies in May 2001. Water Works Sales Companies, with six branches in
Colorado, New Mexico and Texas, significantly expanded the Company's water and
sewer business in new geographic markets.
SEASONALITY
The Company's operating results are impacted by seasonality. Generally, sales of
the Company's products are higher in the second and third quarters of each year
due to more favorable weather conditions during these periods.
COMPETITION
Management believes that the Company is one of the largest wholesale
distributors of its range of products in the United States and that no other
company competes against it across all of its product categories. However, there
is strong competition in each product category distributed by the Company. The
main sources of competition are other wholesalers, manufacturers who sell
certain lines directly to contractors and, to a limited extent, retailers in the
markets for plumbing, electrical fixtures and supplies, building materials, and
contractors' tools. The principal competitive factors in the Company's business
are product availability, pricing, technical knowledge as to application and
usage, and advisory and other service capabilities which develop the trust
factor needed in successful customer relationships.
Page 10 of 24
INVENTORIES
The Company is a wholesale distributor of construction and industrial materials
and maintains significant inventories to meet rapid delivery requirements and to
ensure a continuous allotment of goods from suppliers. As of January 25, 2002,
inventories totaled approximately $396.4 million and represented approximately
31% of the Company's total assets.
EMPLOYEES
As of January 25, 2002, the Company had 7,156 employees consisting of 15
executives, 538 managers, 2,036 sales personnel and 4,567 other employees,
including truck drivers, warehouse personnel, office and clerical workers. Over
the last year, the Company's work force has decreased approximately 7%. This
decrease was primarily the result of the eliminations of various management and
staff positions to bring headcount more in line with current economic conditions
and to streamline the Company's operations. This reduction is also impacted by
the closure of approximately 40 branches in fiscal 2002. The decrease was
partially offset by increases resulting from acquired and newly-opened wholesale
branches. The Company considers its relationships with its employees to be good.
ENVIRONMENTAL LAWS
Compliance with federal, state and local environmental protection laws has not
had in the past, and is not expected to have in the future, a material effect
upon the Company's liquidity or results of operations.
RISK FACTORS
The following factors could significantly affect our operations and financial
results and cause our results to differ from those anticipated by
forward-looking statements in this Report:
The Company's operating results are linked to the strength of the construction
markets.
Demand for the Company's products depends highly on the commercial, residential,
and industrial construction markets. The level of activity in the commercial
construction market depends largely on vacancy rates, interest rates, regional
economic outlooks, the availability of financing, and general economic
conditions. The level of activity in the residential construction market depends
on new housing starts and residential renovation projects. Factors influencing
the demand for new housing starts and residential renovation projects include
interest rates, availability of financing, housing affordability, unemployment,
demographic trends, gross domestic product growth, and consumer confidence. The
level of activity in the industrial construction market depends on the
industrial economic outlook, corporate profitability, interest rates, and
capacity utilization. The factors influencing each of the Company market
segments are not within its control. Since each of the Company's market segments
is sensitive to cyclical changes in the economy, future downturns in the economy
or lack of improvement in the economy may adversely affect its results of
operations. The Company is especially susceptible to economic fluctuations in
Florida, Texas, and Georgia, which accounted for approximately 24%, 17%, and 10%
of its net sales, respectively, in fiscal 2002.
Fluctuating commodity prices and unexpected product shortages may impair the
Company's operating results.
The cost of stainless steel, aluminum, copper, nickel alloys, plastic, and other
commodities used in products distributed by the Company can be volatile.
Significant fluctuations in the cost of such commodities may adversely affect
the Company's results of operations and contribute to cyclicality in its
operating performance. In total, the Company distributes construction materials
and supplies from over 13,000 manufacturers and vendors, no one of which
accounted for more than 5% of total material and supply purchases during fiscal
2002. Despite this widely diversified base of manufacturers and vendors, the
Company may still experience shortages as a result of unexpected demand or
production difficulties. If this were to occur and the Company was unable to
obtain a sufficient allocation of products from manufacturers and vendors, there
could be a short-term adverse effect on its results of operations. In addition,
the Company has entered into strategic partnerships with certain vendors. The
Company's inability to maintain such partnerships, and the loss of the
competitive pricing such partnerships offer the Company could adversely affect
its results of operations.
Page 11 of 24
The Company operates in very competitive marketplace.
The building products industry is highly competitive and fragmented. The
principal competitive factors in the Company's business are:
o availability of materials and supplies;
o pricing of products;
o availability of credit;
o technical product knowledge as to application and usage; and
o advisory or other service capabilities.
Hughes Supply's competition includes other wholesalers, manufacturers who sell
certain products directly to its customer base, and certain Hughes Supply
customers. The Company also competes, to a limited extent, with retailers in the
markets for plumbing, electrical fixtures and supplies, building materials, and
contractors' tools. Competition varies depending on product line, customer
classification, and geographic market. The Company may not be successful in
responding effectively to competitive pressures, particularly from competitors
with substantially greater financial and other resources than the Company.
The Company relies heavily on its key personnel.
The Company is highly dependent upon the skills, experience and efforts of its
executive officers. The loss of one or more of its executive officers could have
a material adverse effect on its business and development. Hughes Supply's
growth also depends in part on its ability to attract and retain qualified
managers, salespersons and other key employees and on its ability to manage
growth successfully. The Company may not be successful in attracting and
retaining such employees or in managing its growth successfully, which may in
turn have an adverse effect on its results of operations.
Dividend payments are restricted.
The decision to pay dividends and the amount of such payments depends on the
Company's results of operations, financial condition, capital requirements, and
other factors that the Board of Directors deems relevant. The Company is also
party to certain debt instruments and agreements that contain provisions
limiting the amount of dividends that may be paid by the Company to its
shareholders. In the future, the Company may become a party to debt instruments
or agreements that may further restrict its ability to pay dividends.
Hughes Supply's stock price may fluctuate substantially.
The market price for Hughes Supply's common stock may fluctuate substantially
based, among other factors, on:
o availability of credit;
o the Company's operating results;
o the operating results of other companies in the building products
industry;
o changes in general economic conditions;
o changes in the financial markets; and
o other developments affecting the Company or its competitors.
The Company's sales are predominately on credit.
The Company distributes materials, equipment, and supplies for the construction
and industrial markets primarily in the Southeastern, Southwestern, and
Midwestern United States. Approximately 95% of the Company's net sales are
credit sales made primarily to customers whose ability to pay depends on the
economic strength of the construction industry in such regions. Cyclical changes
in the economy, future downturns in the economy, or lack of improvement in the
economy in such regions could adversely affect the Company's ability to collect
trade accounts receivable and in turn its results of operations.
Page 12 of 24
Quarterly results are seasonal.
The Company's net sales and net income are seasonal. Hughes Supply has
historically experienced lower operating results in the first and fourth
quarters than in the second and third quarters of its fiscal year. Seasonal
variations in operating results may also be significantly increased by weather
conditions, such as cold or wet weather, which can delay construction projects.
Political and economic events can also affect revenues. If sales fall below
expectations, the Company's operating results may be adversely affected.
The Company's operations may be impacted by the success of its system
integration project.
The Company began implementing a company-wide operating system in December 2001
and expects implementation to be staggered over approximately a two-year period.
The Company believes that this timeframe will enable it to reduce risk, minimize
customer disruption, and spread implementation costs. The Company may be
adversely affected if the new operating system does not meet management's
expectations.
Certain anti-takeover provisions may make Hughes Supply's stock less attractive
to investors.
Certain provisions of the Company's Restated Articles of Incorporation, as
amended, and Florida law may make it more difficult for a third party to acquire
a controlling interest in Hughes Supply even if such change in control would
benefit shareholders. These provisions may delay or prevent transactions in
which shareholders would receive a substantial premium for their shares over
then prevailing market prices. These provisions may also limit shareholders'
ability to approve transactions they may otherwise believe are in their best
interests. Such provisions include:
o a provision dividing the Board of Directors into three classes of
directors elected for staggered three-year terms;
o a provision authorizing the issuance of preferred stock without
shareholder approval; and
o a provision requiring that certain business combinations receive
approval by two-thirds of its voting stock.
ITEM 2. PROPERTIES
The Company leases approximately 65,000 square feet of an office building in
Orlando, Florida for its corporate headquarters. The Company also leases
approximately 31,000 square feet of a computer center in Orlando, Florida for
its IT operations. In addition, the Company owns or leases 434 branches in 34
states and Mexico. The typical sales branch consists of a combined office and
warehouse facility ranging in size from 1,000 to 150,000 square feet, with paved
parking and storage areas. The Company also operates six central distribution
centers, ranging in size from 54,000 to 160,000 square feet. The Company
believes that its properties are in good condition and are suitable and adequate
to carry on the Company's business. None of the owned principal properties is
subject to any encumbrance material to the consolidated operations of the
Company. Additional information regarding owned and leased properties of the
Company is set forth as Exhibit 99.1 to this Report.
ITEM 3. LEGAL PROCEEDINGS
The Company is involved in various legal proceedings arising in the normal
course of its business. In the opinion of management, none of the proceedings
are material in relation to the Company's consolidated operations, cash flows,
or financial position.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of the Company's security holders during the
fourth quarter of the fiscal year ended January 25, 2002.
Page 13 of 24
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Information with respect to the principal market for the Company's common stock,
stock prices and dividend information is set forth under the caption "Corporate
and Shareholder Information" and in Note 13 of the Notes to Consolidated
Financial Statements of the Company's Annual Report to Shareholders for the
fiscal year ended January 25, 2002, a copy of which is filed as an exhibit to
this Report, and the cited portions of which are incorporated herein by
reference.
ITEM 6. SELECTED FINANCIAL DATA
Information with respect to selected financial data of the Company is set forth
under the caption "Selected Financial Data" of the Company's Annual Report to
Shareholders for the fiscal year ended January 25, 2002, a copy of which is
filed as an exhibit to this Report and the cited portion of which is
incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Information with respect to the Company's financial condition, changes in
financial condition and results of operations is set forth under the caption
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" of the Company's Annual Report to Shareholders for the fiscal year
ended January 25, 2002, a copy of which is filed as an exhibit to this Report
and, the cited portion of which is incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information with respect to the Company's market risk is set forth under the
caption "Quantitative and Qualitative Disclosure About Market Risk" under the
caption "Management's Discussion and Analysis of Financial Condition and Results
of Operations" of the Company's Annual Report to Shareholders for the fiscal
year ended January 25, 2002, a copy of which is filed as an exhibit to this
Report, and the cited portion of which is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
(a) Financial Statements
The financial statements filed with this Report are set forth in Item 14(a).
(b) Selected Quarterly Financial Data
Information with respect to selected quarterly financial data of the Company is
set forth in Note 13 of the Notes to Consolidated Financial Statements of the
Company's Annual Report to Shareholders for the fiscal year ended January 25,
2002, a copy of which is filed as an exhibit to this Report, and the cited
portion of which is incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
The Company has not had any change in, or disagreement with, its accountants or
reportable event which are required to be reported in response to this item.
Page 14 of 24
PART III
All information required by Part III (Items 10, 11, 12 and 13) is incorporated
by reference to the Company's Definitive Proxy Statement for the 2002 Annual
Meeting of Shareholders.
Page 15 of 24
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this Report:
(1) All Financial Statements
The following consolidated financial statements of the Company and its
subsidiaries included in the Company's Annual Report to Shareholders for the
fiscal year ended January 25, 2002, are filed under Item 8 and are incorporated
by reference:
Annual
Report
Page(s)
Consolidated Statements of Income for the years ended
January 25, 2002, January 26, 2001 and January 28, 2000........... 10
Consolidated Balance Sheets as of January 25, 2002 and
January 26, 2001.................................................. 11
Consolidated Statements of Shareholders' Equity for the years
ended January 25, 2002, January 26, 2001 and January 28, 2000..... 12
Consolidated Statements of Cash Flows for the years ended
January 25, 2002, January 26, 2001 and January 28, 2000........... 13
Notes to Consolidated Financial Statements........................ 14-26
Report of Independent Certified Public Accountants................ 27
Management's Responsibility for Financial Statements.............. 27
Page 16 of 24
(2) Financial Statement Schedules
Schedule II - Valuation and Qualifying Accounts for the fiscal years ended
January 25, 2002, January 26, 2001 and January 28, 2000.
Hughes Supply, Inc.
Schedule II - Valuation and Qualifying Accounts
(in thousands)
Fiscal Years Ended
---------------------------------------
January 25, January 26, January 28,
2002 2001 2000
----------- ----------- -----------
Allowance for doubtful accounts:
Balance at beginning of year $ 6,106 $ 2,777 $ 2,809
Additions charged to costs and expenses, net 11,065 10,626 4,064
Deductions (8,783) (7,297) (4,096)
-------- -------- --------
Balance at end of year $ 8,388 $ 6,106 $ 2,777
======== ======== ========
Inventory reserves:
Balance at beginning of year $ 10,379 $ 7,253 $ 4,117
Additions charged to costs and expenses, net 8,044 12,395 8,489
Deductions (8,574) (9,269) (5,353)
-------- -------- --------
Balance at end of year $ 9,849 $ 10,379 $ 7,253
======== ======== ========
Deferred income taxes:
Balance at beginning of year $ 698 $ -- $ --
Additions charged to costs and expenses, net -- 698 --
Deductions (626) -- --
-------- -------- --------
Balance at end of year $ 72 $ 698 $ --
======== ======== ======
All other schedules have been omitted as they are either not applicable, not
required or the information is given in the financial statements or related
notes thereto.
Page 17 of 24
Report of Independent Certified Public Accountants on
Financial Statement Schedule
To the Shareholders and Board of Directors
of Hughes Supply, Inc.
Our audits of the consolidated financial statements referred to in our report
dated March 14, 2002 appearing in the 2002 Annual Report to Shareholders of
Hughes Supply, Inc. (which report and consolidated financial statements are
incorporated by reference in this Annual Report on Form 10-K) also included an
audit of the financial statement schedule listed in Item 14(a)(2) of this Form
10-K. In our opinion, this financial statement schedule presents fairly, in all
material respects, the information set forth therein when read in conjunction
with the related consolidated financial statements.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Orlando, Florida
March 14, 2002
Page 18 of 24
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the fourth quarter ended January
25, 2002.
(c) Exhibits Filed
A substantial number of the exhibits referred to below are indicated as having
been previously filed as exhibits to other reports under the Securities Exchange
Act of 1934, as amended, or as exhibits to registration statements under the
Securities Act of 1933, as amended. Such previously filed exhibits are
incorporated by reference in this Form 10-K. Exhibits not incorporated by
reference herein are filed with this Report.
(2) Plan of acquisition, reorganization, arrangement, liquidation or
succession. Not applicable.
(3) Articles of incorporation and by-laws.
3.1 Restated Articles of Incorporation, as amended, incorporated by
reference to Exhibit 3.1 to Form 10-Q for the quarter ended
April 30, 1997 (Commission File No. 001-08772).
3.2 Composite By-Laws, as amended, incorporated by reference to
Exhibit 3.2 to Form 10-Q for the quarter ended October 31, 1999
(Commission File No. 001-08772).
3.3 Form of Articles of Amendment to Restated Articles of
Incorporation of the Company, incorporated by reference to
Exhibit 99.2 to Form 8-A dated May 22, 1998 (Commission File
No. 001-08772).
(4) Instruments defining the rights of security holders, including
indentures.
4.1 Form of Common Stock Certificate representing shares of the
Registrant's common stock, $1.00 par value, incorporated by
reference to Exhibit 4.1 to Form 10-Q for the quarter ended
July 31, 1997 (Commission File No. 001-08772).
4.2 Rights Agreement dated as of May 20, 1998 between Hughes
Supply, Inc. and American Stock Transfer & Trust Company,
incorporated by reference to Exhibit 99.2 to Form 8-A dated May
22, 1998 (Commission File No. 001-08772).
(9) Voting trust agreement. Not applicable.
(10) Material contracts.
10.1 Lease Agreements with Hughes, Inc.
(a) Leases effective March 31, 1988, incorporated by
reference to Exhibit 10.1(c) to Form 10-K for the year
ended January 27, 1989 (Commission File No. 0-5235).
Sub-Item Property
-------- --------
(1) Clearwater
(2) Daytona Beach
(3) Fort Pierce
(4) Lakeland
(6) Leesburg
(7) Orlando Electrical Operation
(8) Orlando Plumbing Operation
(9) Orlando Utility Warehouse
(11) Sarasota
(12) Venice
(13) Winter Haven
Page 19 of 24
(b) Lease Agreement dated June 1, 1987, between Hughes, Inc.
and the Registrant, for additional Sarasota property,
incorporated by reference to Exhibit 10.1(j) to Form 10-K
for the fiscal year ended January 29, 1988 (Commission
File No. 0-5235).
(c) Lease Agreement dated March 11, 1992, incorporated by
reference to Exhibit 10.1(e) to Form 10-K for the fiscal
year ended January 31, 1992 (Commission File No. 0-5235).
Sub-Item Property
-------- --------
(2) Gainesville Electrical Operation
(d) Amendments to leases between Hughes, Inc. and the
Registrant, dated April 1, 1998, amending the leases for
the thirteen properties listed in Exhibit 10.1(b), (d)
and (e), incorporated by reference to Exhibit 10.1 to
Form 10-K for the fiscal year ended January 30, 1998
(Commission File No. 001-08772).
10.2 Hughes Supply, Inc. 1988 Stock Option Plan as amended March 12,
1996 incorporated by reference to Exhibit 10.2 to Form 10-K for
the fiscal year ended January 26, 1996 (Commission File No.
001-08772).
10.4 Directors' Stock Option Plan, as amended, incorporated by
reference to Exhibit 10.4 to Form 10-Q for the quarter ended
October 31, 1999 (Commission File No. 001-08772).
10.5 Hughes Supply, Inc. Amended Senior Executives' Long-Term
Incentive Bonus Plan, adopted January 25, 1996, incorporated by
reference to Exhibit 10.9 to Form 10-K for the fiscal year
ended January 26, 1996 (Commission File No. 001-08772).
10.6 Note Purchase Agreement, dated as of August 28, 1997, by and
among the Company and certain purchasers identified in Schedule
A of the Note Purchase Agreement, incorporated by reference to
Exhibit 10.15 to Form 10-Q for the quarter ended July 31, 1997
(Commission File No. 001-08772).
10.7 (a) Hughes Supply, Inc. 1997 Executive Stock Plan, incorporated
by reference to Exhibit 10.7 to Form 10-K for the fiscal year
ended January 28, 2000 (Commission File No. 001-08772).
10.7 (b) Amendment No. 1 to the Hughes Supply, Inc. 1997 Executive
Stock Plan, incorporated by reference to Exhibit 10.7(b) to
Form 10-Q for the quarter ended April 30, 2000 (Commission File
No. 001-08772).
10.8 Note Purchase Agreement, dated as of May 29, 1996, by and among
the Company and certain purchasers identified in Schedule A of
the Note Purchase Agreement, incorporated by reference to
Exhibit 10.13 to Form 10-K for the fiscal year ended January
30, 1998 (Commission File No. 001-08772).
10.9 Note Purchase Agreement, dated as of May 5, 1998, by and among
the Company and certain purchasers identified in Schedule A of
the Note Purchase Agreement, incorporated by reference to
Exhibit 10.11 to Form 10-Q for the quarter ended April 30, 1998
(Commission File No. 001-08772).
10.10 Revolving Credit Agreement, dated as of January 26, 1999 and
amended on various dates through December 20, 2000, by and
among the Company and a group of banks incorporated by
reference to Exhibit 10.10 to Form 10-K for the fiscal year
ended January 26, 2001. (Commission File No. 001-08772).
10.11 Line of Credit Agreement, dated as of January 26, 1999 and
amended on various dates through
Page 20 of 24
December 20, 2000, by and among the Company and a group of
banks incorporated by reference to Exhibit 10.11 to Form 10-Q
for the quarter ended July 31, 2001. (Commission File No.
001-08772)
10.11 (a) Sixth Amendment to the Line of Credit Agreement dated as
of January 30, 2002 by and among the Company and a group
of banks.
10.12 Note Purchase Agreement, dated as of December 21, 2000 and
amended January 19, 2001, by and among the Company and certain
purchasers identified in Schedule A of the Note Purchase
Agreement incorporated by reference to Exhibit 10.12 to Form
10-K for the fiscal year ended January 26, 2001 (Commission
File No. 001-08772).
10.13 Separation and Release Agreement, dated as of March 28, 2001,
by and between the Company and A. Stewart Hall, Jr.
incorporated by reference to Exhibit 10.12 to Form 10-K for the
fiscal year ended January 26, 2001 (Commission File No.
001-08772).
10.14 Master Lease Agreement, dated as of June 22, 2001 between
Atlantic Financial Group, Ltd, Lessor and Hughes Supply, Inc.
and Certain Subsidiaries of Hughes Supply, Inc. as Lessees -
Synthetic Lease incorporated by reference to Exhibit 10.14 to
Form 10-Q for the quarter ended October 31, 2001 (Commission
File No. 001-08772).
10.14 (a) Loan Agreement, dated as of June 22, 2001 among Atlantic
Financial Group, Ltd, as Lessor and Borrower, the
financial institutions party thereto as Lenders and
SunTrust Bank, as Agent - Synthetic Lease incorporated by
reference to Exhibit 10.14 (a) to Form 10-Q for the
quarter ended October 31, 2001 (Commission File No.
001-08772).
10.14 (b) Construction Agency Agreement, dated as of June 22, 2001
among Atlantic Financial Group, Ltd, and Hughes Supply,
Inc. as Construction Agent - Synthetic Lease incorporated
by reference to Exhibit 10.14 (b) to Form 10-Q for the
quarter ended October 31, 2001 (Commission File No.
001-08772).
10.14 (c) Guaranty Agreement from Hughes Supply, Inc., dated as of
June 22, 2001 - Synthetic Lease incorporated by reference
to Exhibit 10.14 (c) to Form 10-Q for the quarter ended
October 31, 2001 (Commission File No. 001-08772).
10.14 (d) Appendix A to the Operative Documents, Definitions and
Interpretation - Synthetic Lease incorporated by
reference to Exhibit 10.14 (d) to Form 10-Q for the
quarter ended October 31, 2001 (Commission File No.
001-08772).
10.15 Master Lease Agreement, dated as of June 22, 2001 between
Atlantic Financial Group, Ltd, as Lessor and Hughes Supply,
Inc. and Certain Subsidiaries of Hughes Supply, Inc., as
Lessees - Operating Lease incorporated by reference to Exhibit
10.15 to Form 10-Q for the quarter ended October 31, 2001
(Commission File No. 001-08772).
10.15 (a) Loan Agreement, dated as of June 22, 2001 among Atlantic
Financial Group, Ltd, as Lessor and Borrower, the
financial institutions party hereto as Lenders and
SunTrust Bank, as Agent - Operating Lease incorporated by
reference to Exhibit 10.15 (a) to Form 10-Q for the
quarter ended October 31, 2001 (Commission File No.
001-08772).
10.15 (b) Construction Agency Agreement, dated as of June 22, 2001
among Atlantic Financial Group, Ltd, and Hughes Supply,
Inc. as Construction Agent - Operating Lease incorporated
by reference to Exhibit 10.15 (b) to Form 10-Q for the
quarter ended October 31, 2001 (Commission File No.
001-08772).
Page 21 of 24
10.15 (c) Guaranty Agreement from Hughes Supply, Inc., dated as of
June 22, 2001 - Operating Lease incorporated by reference
to Exhibit 10.15 (c) to Form 10-Q for the quarter ended
October 31, 2001 (Commission File No. 001-08772).
10.15 (d) Appendix A to the Operative Documents, Definitions and
Interpretation - Operating Lease incorporated by
reference to Exhibit 10.15 (d) to Form 10-Q for the
quarter ended October 31, 2001 (Commission File No.
001-08772).
10.16 Uncommitted Guidance and Swing Line Demand Promissory Note
dated March 1, 1999 and amended on various dates through
February 11, 2002, by the Company and SunTrust Bank, Inc.
(11) Statement re computation of per share earnings. Not applicable.
(12) Statements re computation of ratios. Not applicable.
(13) Annual report to security holders, Form 10-Q or quarterly report to
security holders.
13.1 Information incorporated by reference into Form 10-K from the
Annual Report to Shareholders for the fiscal year ended January
25, 2002.
(16) Letter re change in certifying accountant. Not applicable.
(18) Letter re change in accounting principles. Not applicable.
(21) Subsidiaries of the Registrant.
21.1 Subsidiaries of the Registrant.
(22) Published report regarding matters submitted to vote of security
holders. Not applicable.
(23) Consents of experts and counsel.
23.1 Consent of PricewaterhouseCoopers LLP.
(24) Power of attorney. Not applicable.
(99) Additional exhibits.
99.1 Location of Facilities.
Page 22 of 24
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be
signed on its behalf by the undersigned, thereunto duly authorized.
HUGHES SUPPLY, INC.
By: /s/ David H. Hughes
-------------------------------
David H. Hughes
Chairman of the Board and Chief
Executive Officer
/s/ J. Stephen Zepf
-------------------------------
J. Stephen Zepf
Chief Financial Officer and
Chief Accounting Officer
Date: April 22, 2002
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
/s/ David H. Hughes /s/ Toni Jennings
-------------------------- ---------------------------------
David H. Hughes Toni Jennings
April 22, 2002 April 22, 2002
(Director) (Director)
/s/ John D. Baker II /s/ William P. Kennedy
-------------------------- ---------------------------------
John D. Baker II William P. Kennedy
April 22, 2002 April 22, 2002
(Director) (Director)
/s/ Robert N. Blackford /s/ Amos R. McMullian
-------------------------- ---------------------------------
Robert N. Blackford Amos R. McMullian
April 22, 2001 April 22, 2002
(Director) (Director)
/s/ H. Corbin Day /s/ Thomas I. Morgan
-------------------------- ---------------------------------
H. Corbin Day Thomas I. Morgan
April 22, 2002 April 22, 2002
(Director) (Director)
/s/ Vincent S. Hughes
--------------------------
Vincent S. Hughes
April 22, 2002
(Director)
Page 23 of 24
INDEX OF EXHIBITS FILED WITH THIS REPORT
10.11 (a) Sixth Amendment to the Line of Credit Agreement dated
as of January 30, 2002 by and among the Company and a
group of banks.
10.16 Uncommitted Guidance and Swing Line Demand Promissory Note
dated March 1, 1999 and amended on various dates through
February 11, 2002, by the Company and SunTrust Bank, Inc.
13.1 Information incorporated by reference into Form 10-K from
the Annual Report to Shareholders for the fiscal year ended
January 25, 2002.
21.1 Subsidiaries of the Registrant.
23.1 Consent of PricewaterhouseCoopers LLP.
99.1 Location of Facilities.
Page 24 of 24