HUG Hughes Supply

ORLANDO, Fla., Aug. 17 /PRNewswire-FirstCall/ -- Hughes Supply, Inc. (NYSE:HUG) announced today that it has entered into a purchase agreement to acquire TVESCO, Inc., a Tennessee Valley-based distributor of electric utility and electrical products. Hughes anticipates that the closing will occur on or about August 29, 2005, subject to customary closing conditions. TVESCO, Inc. distributes transmission and distribution (T&D) and electrical commercial and industrial (C&I) products to municipal utility, electric cooperative utility and contractor customers through 14 branches in five southeastern states. TVESCO had annual sales of approximately $138 million for the 12 months ended December 31, 2004, and employs 170 full- time associates. Assuming an August 29, 2005 closing, the acquisition is expected to be slightly accretive to fiscal year 2006 earnings, and add approximately $0.03 to fiscal year 2007 diluted earnings per share. Tom Morgan, President and CEO of Hughes Supply, commented, "We believe serving the electric utilities industry is an excellent business with very good long-term growth prospects as utility companies, in efforts to increase efficiency and productivity, are increasingly outsourcing their inventory management and procurement services to distributors. In addition, we expect a higher level of maintenance spending by utility companies with the recent passage of the Energy Bill by Congress that will require electric utilities to meet federal reliability standards for the electricity grid. The maintenance- related nature of the Utilities business, along with its use of multi-year alliance contracts with utility providers, makes it less vulnerable to construction cycles, allowing for a more predictable cash flow. Additionally, its efficient use of capital results in a higher return on invested capital than Hughes Supply's overall return. "The acquisition of TVESCO further strengthens the geographic footprint of our Utilities and Electrical businesses by expanding into the Tennessee Valley region. Its stable base of municipal utility, rural electric cooperative utility and electrical contractor customers nicely complements our existing customer base, and its reputation for customer service excellence is well- aligned with Hughes. "Within our portfolio of businesses, Utilities is one of the higher- growth, higher-return businesses, and with this proposed acquisition, we build our Utilities market leadership position to over $900 million in expected fiscal year 2007 sales. This acquisition allows us to continue to execute our acquisition strategy of investing in market leaders that improve overall profitability, reduce cyclicality, and that expand our geographic footprint. We look forward to having them join the Hughes Supply family," concluded Morgan. 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 over 500 locations in 40 states. Headquartered in Orlando, Florida, Hughes employs approximately 9,400 associates and generated annual revenues of $4.4 billion in its last fiscal year. Hughes is a Fortune 500 company and was named the #1 Most Admired Company in America in the Wholesalers: Diversified Industry segment by FORTUNE Magazine. For additional information on Hughes Supply, you may visit http://www.hughessupply.com/ . Forward-Looking Statements 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, competition, delay in implementing operating systems, reliance on key personnel, success in integrating and achieving expected profitability from acquired businesses, achieving enhanced profitability goals, fluctuating commodity prices, the Company's fixed cost structure, customer credit policies, unexpected product shortages, product purchasing and supply, overseas movement of manufacturing facilities, success in completing strategic acquisitions 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. http://www.newscom.com/cgi-bin/prnh/19990803/HUGLOGO http://photoarchive.ap.org/ DATASOURCE: Hughes Supply, Inc. CONTACT: Arleen Llerandi, Vice President, Investor Relations, Hughes Supply, +1-407-822-2989 Web site: http://www.hughessupply.com/

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