Hughes' Net Income Up but Commercial Construction Sluggish

ORLANDO-Numbers don’t lie and the first-quarter numbers being reported by locally based Hughes Supply Inc. show the nation’s commercial and industrial real estate segments remain sluggish.

Hughes, one of the nation’s largest wholesale distributors of construction and industrial materials, logged first-quarter net income of $12.4 million on sales of $790 million versus $6.4 million on $775 million in the same 2001 period.

Earnings per share were 52 cents compared with 27 cents previously. But comparable branch sales were down 5%. The company’s first quarter comprised 14 weeks compared with 13 weeks last year. The additional week added about $55 million in net sales.

“Comparable branch sales were within the range we had anticipated,” Hughes chairman David Hughes says in a prepared statement. “The economy as a whole is improving but the non-residential building sector continues to lag behind.”

He says industrial construction, office buildings, hotels and light commercial construction are “running well behind previous levels.”

Hughes attributes the company’s first-quarter operating results and improved margins to cost controls and corporate restructuring started last year.

Asset management and cash flow improvements have allowed Hughes Supply to reduce total debt by another $52 million since January. Long-term debt of $349.3 million is down from $487.5 million a year ago.

But the company’s cash on hand and cash equivalents numbers are also down from $14 million in April 2001 to $2.97 million