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) -- 05/08/14 -- 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:
Nicol G. Graham
Chief Financial Officer
Direct: 713.609.2125
Fax: 713.609.2168
ngraham@houwire.com

Source: Houston Wire & Cable Company

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