SOURCE: Houston Wire & Cable Company

Houston Wire & Cable Company

May 08, 2014 07:30 ET

Houston Wire & Cable Company Reports Results for the First Quarter of 2014

Record Sales of $100.3 Million

Increased Dividend by 9.1%

HOUSTON, TX--(Marketwired - May 8, 2014) - Houston Wire & Cable Company (NASDAQ: HWCC) (the "Company") announced operating results for the first quarter ended March 31, 2014.

Selected highlights were:

  • Record first quarter sales of $100.3 million
  • Improving regional sales trends contributed to overall growth
  • Net income of $3.7 million
  • Diluted EPS of $0.21
  • Declared a dividend of $0.12 per share

First Quarter Summary
Jim Pokluda, President and Chief Executive Officer commented, "We are very pleased to report record first quarter sales levels, which represented a 6% increase over the prior year quarter, or 10% as adjusted for fluctuations in metals prices, and a 6% increase sequentially. These results are primarily due to improved regional performances, including contributions from territories that had under-performed in 2013, increased project activity and continued Maintenance, Repair and Operations (MRO) growth. Despite these enhanced contributions from certain regions, however, there are still areas of the country where demand remains sluggish and shows minimal signs of recovery.

MRO business increased slightly over 1%, or approximately 4% on a metals adjusted basis, and project sales increased 16%, or approximately 19% on a metals adjusted basis over the prior year quarter. We are pleased that the release of formerly booked project business was not negatively impacted by the inclement weather conditions experienced across a wide portion of the country. We do believe, however, that the weather did have some negative impact on the MRO side of our business, which is largely dependent on immediate daily demand."

Strategic expansion of our distribution platform into underserviced geographic regions continued as we opened a new location in Odessa, Texas, in February, which followed the fourth quarter 2013 opening of our Alaska location. 

The continued overall competitiveness of the marketplace, varying levels of market demand, and deflation in the price of copper resulted in a gross margin of 21.6%, which was down 110 basis points from the first quarter of 2013, but near flat sequentially.

Operating expenses, although up 2% from the prior year period decreased as a percent of sales to 15.3% from 15.9% in the prior year period and from 16.1% sequentially.

Interest expense was flat with the prior year period and the effective interest rate remained at 1.9%. The effective tax rate for the quarter was 38.4%, up from the 36.8% rate in 2013. The prior year included a state tax credit, but 2014 was consistent with historical annual rates.

Net income of $3.7 million fell 3% short of the prior year period, but increased sequentially by 19%. Diluted earnings per share were $0.21, compared to $0.22 in the prior year quarter.

Conference Call
The Company will host a conference call to discuss first quarter results today, Thursday, May 8, 2014, at 10:00 a.m., C.D.T. Hosting the call will be James Pokluda, President and Chief Executive Officer, and Nicol Graham, Vice President and Chief Financial Officer.

A live audio web cast of the call will be available on the Investor Relations section of the Company's website www.houwire.com.  

Approximately two hours after the completion of the live call, a telephone replay will be available until May 15, 2014.

Replay, Toll-Free #: 855-859-2056
Replay, Toll #: 404-537-3406
Conference ID #35031280

About the Company
With 39 years of experience in the industry, Houston Wire & Cable Company is one of the largest providers of wire and cable in the U.S. market. Headquartered in Houston, Texas, the Company has sales and distribution facilities strategically located throughout the nation.

Standard stock items available for immediate delivery include: continuous and interlocked armor cable; control and power cable; electronic wire and cable; flexible and portable cords; instrumentation and thermocouple cable; lead and high temperature cable; medium voltage cable; premise and category wire and cable; primary and secondary aluminum distribution cable; wire rope and wire rope slings, as well as synthetic slings, chain, shackles and other related hardware. We also offer private branded products including our proprietary brand, LifeGuard™, a low-smoke, zero-halogen cable. Comprehensive value-added services include same-day shipping, knowledgeable sales staff, inventory management programs, just-in-time delivery, logistics support, customized internet-based ordering capabilities and 24/7/365 service.

Forward-Looking Statements
This release contains comments concerning management's view of the Company's future expectations, plans and prospects that constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are inherently uncertain and projections about future events may, and often do, vary materially from actual results.

Other risk factors that may cause actual results to differ materially from statements made in this press release can be found in the Company's Annual Report on Form 10-K and other documents filed with the SEC. These documents are available under the Investor Relations section of the Company's website at www.houwire.com.

Any forward-looking statements speak only as of the date of this press release and the Company undertakes no obligation to publicly update such statements.

   
HOUSTON WIRE & CABLE COMPANY  
Consolidated Balance Sheets  
(In thousands, except share data)  
   
    March 31,     December 31,  
    2014     2013  
    (unaudited)        
Assets                
Current assets:                
  Accounts receivable, net   $ 67,028     $ 60,408  
  Inventories, net     91,932       96,107  
  Deferred income taxes     2,794       2,591  
  Income taxes     --       420  
  Prepaids     1,251       762  
Total current assets     163,005       160,288  
                 
Property and equipment, net     8,321       7,974  
Intangible assets, net     9,801       10,234  
Goodwill     17,520       17,520  
Other assets     194       159  
Total assets   $ 198,841     $ 196,175  
                 
Liabilities and stockholders' equity                
Current liabilities:                
  Book overdraft   $ 2,948     $ 4,594  
  Trade accounts payable     13,526       13,637  
  Accrued and other current liabilities     9,757       18,772  
  Income taxes     2,102       --  
Total current liabilities     28,333       37,003  
                 
Debt     58,170       47,952  
Other long term obligations     97       97  
Deferred income taxes     389       429  
Total liabilities     86,989       85,481  
                 
Stockholders' equity:                
  Preferred stock, $0.001 par value; 5,000,000 shares authorized, none issued and outstanding     --       --  
  Common stock, $0.001 par value; 100,000,000 shares authorized: 20,988,952 shares issued: 17,912,413 and 17,954,032 outstanding at March 31, 2014 and December 31, 2013, respectively     21       21  
  Additional paid-in-capital     55,513       55,642  
  Retained earnings     106,373       104,607  
  Treasury stock     (50,055 )     (49,576 )
Total stockholders' equity     111,852       110,694  
                 
Total liabilities and stockholders' equity   $ 198,841     $ 196,175  
                 
                 
 
HOUSTON WIRE & CABLE COMPANY
Consolidated Statements of Income
(Unaudited)
(In thousands, except share and per share data)
 
    Three Months Ended
    March 31,
    2014   2013
         
Sales   $ 100,299   $ 94,304
Cost of sales     78,595     72,925
Gross profit     21,704     21,379
             
Operating expenses:            
  Salaries and commissions     8,123     7,967
  Other operating expenses     6,492     6,281
  Depreciation and amortization     741     745
Total operating expenses     15,356     14,993
             
Operating income     6,348     6,386
Interest expense     268     273
Income before income taxes     6,080     6,113
Income taxes     2,335     2,251
Net income   $ 3,745   $ 3,862
             
Earnings per share:            
  Basic   $ 0.21   $ 0.22
  Diluted   $ 0.21   $ 0.22
Weighted average common shares outstanding:            
  Basic     17,850,911     17,752,682
  Diluted     17,944,010     17,845,442
             
Dividends declared per share   $ 0.11   $ 0.09
             
             
   
HOUSTON WIRE & CABLE COMPANY  
Consolidated Statements of Cash Flows  
(Unaudited)  
(In thousands)  
   
    Three Months
Ended March 31,
 
    2014     2013  
             
Operating activities                
Net income   $ 3,745     $ 3,862  
Adjustments to reconcile net income to net cash (used in) provided by operating activities:                
  Depreciation and amortization     741       745  
  Amortization of unearned stock compensation     213       245  
  Provision for inventory obsolescence     412       210  
  Deferred income taxes     (243 )     (312 )
  Other non-cash items     17       (29 )
  Changes in operating assets and liabilities:                
    Accounts receivable     (6,632 )     6,708  
    Inventories     3,763       2,685  
    Book overdraft     (1,646 )     3,855  
    Trade accounts payable     (111 )     (1,849 )
    Accrued and other current liabilities     (9,264 )     (6,272 )
    Income taxes payable     2,522       2,475  
    Other operating activities     (529 )     (274 )
Net cash (used in) provided by operating activities     (7,012 )     12,049  
                 
Investing activities                
  Expenditures for property and equipment     (655 )     (274 )
Net cash used in investing activities     (655 )     (274 )
                 
Financing activities                
  Borrowings on revolver     99,007       94,696  
  Payments on revolver     (88,789 )     (105,274 )
  Payment of dividends     (1,959 )     (1,596 )
  Purchase of treasury stock     (626 )     (2 )
  Other financing activities     34       127  
Net cash provided by (used in) financing activities     7,667       (12,049 )
                 
Net change in cash     --       (274 )
Cash at beginning of period     --       274  
                 
Cash at end of period   $ --     $ --  
                 
                 

Contact Information

  • CONTACT:
    Nicol G. Graham
    Chief Financial Officer
    Direct: 713.609.2125
    Fax: 713.609.2168
    ngraham@houwire.com