HOUSTON, TX--(Marketwired - May 7, 2015) - Houston Wire & Cable Company (NASDAQ: HWCC) (the "Company") announced operating results for the first quarter ended March 31, 2015.

Selected quarterly highlights were:

  • Sales of $81.6 million
  • Net income of $2.2 million
  • Diluted EPS of $0.13
  • Cash flow of $10.3 million
  • Declared a dividend of $0.12 cents per share on May 5, 2015

First Quarter Summary
Jim Pokluda, President and Chief Executive Officer commented, "The sharp decline in oil prices in the latter part of 2014, which depressed industrial demand, and the deflation in the price of metals, both affected the level of our business activity during the first quarter. Sales decreased 18.6% from the first quarter of 2014, or approximately 14.3% when adjusted for declining metals prices. We estimate that Maintenance, Repair and Operations (MRO) sales fell 9% or approximately 5% on a metals-adjusted basis, while project sales decreased approximately 33%, or 29% on a metals-adjusted basis. Metals adjusted project and total sales excluding the negative impact resulting from a decline in a large and ongoing infrastructure project fell 9% and 7% respectively. Total transactional invoice activity decreased by approximately 5%." 

Gross margin at 21.7% increased 10 basis points from the first quarter of 2014. Operating expenses at $14.0 million fell 8.8% or $1.4 million from Q1 2014 and by $0.5 million on a sequential basis. Pokluda commented "Despite a very difficult operating environment, our gross margin controls and cost savings initiatives are working and I am pleased with the results of those efforts. 

"Reduced market demand has not compromised HWCC's pricing power in the core area of our business involving MRO transactions, and although the present day pull-back in large capital project spend is frustrating, the long term fundamentals for this market opportunity are intact. Channel feedback continues to indicate exceptionally high levels of customer satisfaction, continued growth in market share and increasing support for our product line expansions into highly engineered power and control cable, aluminum cable and specialty oil and gas cable."

Interest expense of $0.3 million was flat with the prior year period. Average debt levels decreased by 10.7% from $54.9 million in 2014 to $49.1 million in 2015, while the effective interest rate increased from 1.9% in 2014 to 2.0% in 2015. The effective tax rate for the quarter of 36.8% was down from the 2014 tax rate of 38.4% primarily due to lower state tax rates in 2015.

Net income of $2.2 million decreased 41.6% from the first quarter of 2014. Diluted earnings per share were $0.13 compared to $0.21 in the prior year quarter.

Mr Pokluda further commented "As we move further into the year, prudent use of working capital, expense management, gross margin optimization, and new business development initiatives will remain top priorities." 

Conference Call
The Company will host a conference call to discuss first quarter results on Thursday, May 7, 2015 at 10:00 a.m., C.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 14, 2015.

Replay, Toll-Free #: 855-859-2056
Replay, Toll #: 404-537-3406
Conference ID # 36567133

About the Company
With over 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, instrumentation, medium voltage, high temperature, portable cord, power cables, primary and secondary aluminum distribution cables, private branded products, including LifeGuard™, a low-smoke, zero-halogen cable, mechanical wire and cable and related hardware, including wire rope, lifting products and synthetic rope and slings. 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,  
   2015    2014  
    (unaudited)        
Assets                
Current assets:                
  Accounts receivable, net   $ 55,158     $ 61,599  
  Inventories, net     81,630       88,958  
  Deferred income taxes     3,444       3,188  
  Income taxes     --       219  
  Prepaids     1,014       565  
Total current assets     141,246       154,529  
                 
Property and equipment, net     9,116       8,954  
Intangible assets, net     8,067       8,501  
Goodwill     17,520       17,520  
Other assets     294       309  
Total assets   $ 176,243     $ 189,813  
                 
Liabilities and stockholders' equity                
Current liabilities:                
  Book overdraft   $ 1,479     $ 3,113  
  Trade accounts payable     7,520       7,993  
  Accrued and other current liabilities     8,034       13,282  
  Income taxes     1,478       --  
Total current liabilities     18,511       24,388  
                 
Debt     47,719       53,847  
Other long term obligations     95       96  
Deferred income taxes     48       175  
Total liabilities     66,373       78,506  
                 
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: 17,316,607 and 17,508,015 outstanding at March 31, 2015 and December 31, 2014, respectively     21       21  
  Additional paid-in-capital     55,470       54,871  
  Retained earnings     111,341       111,233  
  Treasury stock     (56,962 )     (54,818 )
Total stockholders' equity     109,870       111,307  
Total liabilities and stockholders' equity   $ 176,243     $ 189,813  
                 
 
 
HOUSTON WIRE & CABLE COMPANY
Consolidated Statements of Income
(Unaudited)
(In thousands, except share and per share data)
 
   Three Months Ended
   March 31,
   2015  2014
             
Sales   $ 81,600   $ 100,299
Cost of sales     63,876     78,595
Gross profit     17,724     21,704
             
Operating expenses:            
  Salaries and commissions     7,238     8,123
  Other operating expenses     6,048     6,492
  Depreciation and amortization     712     741
Total operating expenses     13,998     15,356
             
Operating income     3,726     6,348
Interest expense     265     268
Income before income taxes     3,461     6,080
Income taxes     1,275     2,335
Net income   $ 2,186   $ 3,745
             
Earnings per share:            
  Basic   $ 0.13   $ 0.21
  Diluted   $ 0.13   $ 0.21
Weighted average common shares outstanding:            
  Basic     17,296,978     17,850,911
  Diluted     17,376,928     17,944,010
             
Dividends declared per share   $ 0.12   $ 0.11
             
   
   
HOUSTON WIRE & CABLE COMPANY  
Consolidated Statements of Cash Flows  
(Unaudited)  
(In thousands)  
   
   Three Months
Ended March 31,
 
   2015    2014  
                 
Operating activities                
Net income   $ 2,186     $ 3,745  
Adjustments to reconcile net income to net cash provided by (used in) operating activities:                
  Depreciation and amortization     712       741  
  Amortization of unearned stock compensation     217       213  
  Provision for inventory obsolescence     356       412  
  Deferred income taxes     (419 )     (243 )
  Other non-cash items     44       17  
  Changes in operating assets and liabilities:                
    Accounts receivable     6,402       (6,632 )
    Inventories     6,972       3,763  
    Book overdraft     (1,634 )     (1,646 )
    Trade accounts payable     (473 )     (111 )
    Accrued and other current liabilities     (5,331 )     (9,264 )
    Income taxes payable     1,697       2,522  
    Other operating activities     (440 )     (529 )
Net cash provided by (used in) operating activities     10,289       (7,012 )
                 
Investing activities                
  Expenditures for property and equipment     (440 )     (655 )
Net cash used in investing activities     (440 )     (655 )
                 
Financing activities                
  Borrowings on revolver     76,746       99,007  
  Payments on revolver     (82,874 )     (88,789 )
  Payment of dividends     (2,070 )     (1,959 )
  Purchase of treasury stock     (1,651 )     (626 )
  Other financing activities     --       34  
Net cash (used in) provided by financing activities     (9,849 )     7,667  
                 
Net change in cash     --       --  
Cash at beginning of period     --       --  
                 
Cash at end of period   $ --     $ --