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.
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HOUSTON WIRE & CABLE COMPANY |
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Consolidated Balance Sheets |
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(In thousands, except share data) |
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March 31, |
|
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December 31, |
|
|
|
2014 |
|
|
2013 |
|
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(unaudited) |
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Assets |
|
|
|
|
|
|
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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 |
|
|
|
|
|
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|
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Liabilities and stockholders' equity |
|
|
|
|
|
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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 |
|
|
|
|
|
|
|
|
|
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Debt |
|
|
58,170 |
|
|
|
47,952 |
|
Other long term obligations |
|
|
97 |
|
|
|
97 |
|
Deferred income taxes |
|
|
389 |
|
|
|
429 |
|
Total liabilities |
|
|
86,989 |
|
|
|
85,481 |
|
|
|
|
|
|
|
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Stockholders' equity: |
|
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|
|
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|
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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 |
|
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Retained earnings |
|
|
106,373 |
|
|
|
104,607 |
|
|
Treasury stock |
|
|
(50,055 |
) |
|
|
(49,576 |
) |
Total stockholders' equity |
|
|
111,852 |
|
|
|
110,694 |
|
|
|
|
|
|
|
|
|
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Total liabilities and stockholders' equity |
|
$ |
198,841 |
|
|
$ |
196,175 |
|
|
|
|
|
|
|
|
|
|
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HOUSTON WIRE & CABLE COMPANY |
Consolidated Statements of Income |
(Unaudited) |
(In thousands, except share and per share data) |
|
|
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Three Months Ended |
|
|
March 31, |
|
|
2014 |
|
2013 |
|
|
|
|
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Sales |
|
$ |
100,299 |
|
$ |
94,304 |
Cost of sales |
|
|
78,595 |
|
|
72,925 |
Gross profit |
|
|
21,704 |
|
|
21,379 |
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
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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 |
|
|
|
|
|
|
|
|
|
|
|
|
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|
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: Nicol G. Graham Chief Financial Officer Direct:
713.609.2125 Fax: 713.609.2168 ngraham@houwire.com
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