Houston Wire & Cable Company Reports Results for the Third
Quarter of 2013
HOUSTON, TX--(Marketwired - Nov 12, 2013) - Houston Wire &
Cable Company (NASDAQ: HWCC) (the "Company") announced operating
results for the third quarter ended September 30, 2013.
Selected results were:
- Sales of $95.2 million
- Operating cash flow of $4.2 million
- Net loss of $3.2 million
- Adjusted net income of $3.5 million excluding impairment
charge relating to the Southern Wire division
- Adjusted diluted EPS of $0.20 per share
- Debt decreased to $44.5 million, lowest level since Q1
2010
- Declared a dividend of $0.11 per share
Adjustments to net income and diluted EPS for the impairment
charge are detailed in the reconciliation schedules below.
Third Quarter Summary Jim Pokluda, President and Chief Executive
Officer, commented, "Our third quarter sales declined 0.9% from the
prior year period due to continued inconsistency in regional
markets and slower than expected broad market recovery, affecting
major capital project spend. We estimate that sales increased
1% when adjusted for deflation in the price of metals. Project
business from our long term growth initiatives encompassing
Environmental Compliance, Engineering & Construction,
Industrials, LifeGuard™ (and other private branded products),
Utility Power Generation, and Mechanical was down approximately 17%
from the prior year period. Positive revenue trends continued
in our major revenue stream, Maintenance, Repair and Operations
(MRO), which increased approximately 8% over the third quarter of
2012, or 10% on a constant metals basis."
Demand inconsistencies, overall competitiveness of the
marketplace, increased customer rebates and softening metals prices
collectively caused gross margins to shrink 50 basis points from
the 2012 period, to 22% in the current year period.
Operating expenses were up $8.0 million or 55.5% primarily
driven by a goodwill impairment charge of $7.6 million related to
the Southern Wire division. Absent this charge, sales and marketing
expenses from a higher headcount and increased medical costs,
offset by lower commissions, caused a 3.2% increase from the prior
year period.
Interest expense declined from $0.3 million in the 2012 period
to $0.2 million in 2013, a decrease of 31.7%. Outstanding debt
at September 2013 of $44.5 million was down $20.5 million or 31.5%
from the $65.0 million level in 2012. The average effective
interest rate fell to 1.9% from 2.0% in 2012.
Adjusted net income of $3.5 million decreased by $0.7 million
from the third quarter of 2012 and adjusted diluted earnings per
share were $0.20 compared to the $0.24 in the prior year
period. Pokluda further commented, "We were pleased to see the
continued growth in our MRO sales, which now marks the fourth
consecutive quarter over quarter growth in this area of
our business. Unfortunately, the return of project demand has not
followed the MRO growth trend, as projects in our under-performing
regions have yet to materialize as quickly as originally
anticipated and continue to be pushed into future
quarters. Despite the impact of these demand inconsistencies,
I am pleased with the improvement in our operating cash flow, debt
reduction and overall leverage and that our strong balance sheet
again allowed us to return funds to our shareholders through the
$0.11 per share dividend."
Nine month summary Sales for the nine month period were up
slightly versus the prior year period and increased approximately
3% when adjusted for deflation in the price of metals. MRO
sales increased approximately 5%, reflecting a continuing recovery
in certain geographic regions and growth in certain end
markets. Project sales within the six long-term growth
initiatives were down approximately 9% as project activity varied
by region, due to delays in project starts and general market
uncertainty.
"The marketplace remains very competitive and varies by region
depending upon the level of economic activity. Margins at
22.2%, down 30 basis points from the prior year, reflect the
pricing required to maintain market competitiveness," said Mr.
Pokluda.
Total operating expenses of $52.3 million including the effect
of the goodwill impairment of $7.6 million, increased 20.3% over
the prior year period. Excluding the impairment, operating expenses
increased by 2.9% or $1.3 million. This was due to the increased
headcount, principally in sales and marketing
personnel. Pokluda further commented, "We remain committed to
ensuring we provide world class service to our customers, while at
the same time being appropriately aggressive as we leverage our
model to maximize results. We continue to closely scrutinize
operating expenses based on the current level of demand in order to
improve the overall efficiency of our operation."
Interest expense of $0.8 million was 18.9% lower than the prior
year's $0.9 million as average debt levels fell from $57.0 million
in 2012 to $53.3 million in 2013 and as interest rates decreased
from 2.1% in 2012 to 1.9% in 2013.
Adjusted net income for the period of $11.4 million fell 9.7%
from the $12.7 million level in the prior year period and adjusted
diluted earnings per share were $0.64 compared to $0.71.
Conference Call The Company will host a conference call to
discuss third quarter results today, Tuesday, November 12, 2013, 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 November 19, 2013.
Replay, Toll-Free #: 855-859-2056 Replay, Toll #: 404-537-3406
Conference ID # 95424648
About the Company With over 35 years 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) |
|
|
|
|
|
September 30, 2013 |
|
|
December 31, 2012 |
|
|
|
(unaudited) |
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
Cash |
|
$ |
-- |
|
|
$ |
274 |
|
|
Accounts receivable, net |
|
|
66,980 |
|
|
|
65,892 |
|
|
Inventories, net |
|
|
80,236 |
|
|
|
84,662 |
|
|
Deferred income taxes |
|
|
2,673 |
|
|
|
2,455 |
|
|
Income taxes |
|
|
543 |
|
|
|
-- |
|
|
Prepaids |
|
|
943 |
|
|
|
841 |
|
Total current assets |
|
|
151,375 |
|
|
|
154,124 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
5,662 |
|
|
|
5,824 |
|
Intangible assets, net |
|
|
10,667 |
|
|
|
11,967 |
|
Goodwill |
|
|
17,520 |
|
|
|
25,082 |
|
Other assets |
|
|
166 |
|
|
|
158 |
|
Total assets |
|
$ |
185,390 |
|
|
$ |
197,155 |
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
Book
overdraft |
|
$ |
4,039 |
|
|
$ |
-- |
|
|
Trade
accounts payable |
|
|
13,999 |
|
|
|
12,330 |
|
|
Accrued and other current liabilities |
|
|
12,823 |
|
|
|
15,379 |
|
|
Income taxes |
|
|
-- |
|
|
|
5 |
|
Total current liabilities |
|
|
30,861 |
|
|
|
27,714 |
|
|
|
|
|
|
|
|
|
|
Debt |
|
|
44,525 |
|
|
|
58,588 |
|
Other long term obligations |
|
|
98 |
|
|
|
103 |
|
Deferred income taxes |
|
|
580 |
|
|
|
1,670 |
|
Total liabilities |
|
|
76,064 |
|
|
|
88,075 |
|
|
|
|
|
|
|
|
|
|
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: 17,941,110 and 17,899,499 outstanding at
September 30, 2013 and December 31, 2012, respectively |
|
|
21 |
|
|
|
21 |
|
|
Additional paid-in-capital |
|
|
55,671 |
|
|
|
55,291 |
|
|
Retained earnings |
|
|
103,437 |
|
|
|
104,252 |
|
|
Treasury stock |
|
|
(49,803 |
) |
|
|
(50,484 |
) |
Total stockholders' equity |
|
|
109,326 |
|
|
|
109,080 |
|
Total liabilities and stockholders' equity |
|
$ |
185,390 |
|
|
$ |
197,155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying Notes are an integral part of these
Consolidated Financial Statements.
|
HOUSTON WIRE & CABLE COMPANY |
Consolidated Statements of Operations |
(Unaudited) |
(In thousands, except share and per share data) |
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
2013 |
|
|
2012 |
|
2013 |
|
2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
$ |
95,214 |
|
|
$ |
96,113 |
|
$ |
288,850 |
|
$ |
288,657 |
Cost of sales |
|
|
74,292 |
|
|
|
74,501 |
|
|
224,824 |
|
|
223,655 |
Gross profit |
|
|
20,922 |
|
|
|
21,612 |
|
|
64,026 |
|
|
65,002 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and commissions |
|
|
7,636 |
|
|
|
7,478 |
|
|
23,388 |
|
|
22,402 |
|
Other
operating expenses |
|
|
6,539 |
|
|
|
6,256 |
|
|
19,135 |
|
|
18,918 |
|
Depreciation and amortization |
|
|
741 |
|
|
|
722 |
|
|
2,244 |
|
|
2,194 |
|
Impairment of goodwill |
|
|
7,562 |
|
|
|
-- |
|
|
7,562 |
|
|
-- |
Total operating expenses |
|
|
22,478 |
|
|
|
14,456 |
|
|
52,329 |
|
|
43,514 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income |
|
|
(1,556 |
) |
|
|
7,156 |
|
|
11,697 |
|
|
21,488 |
Interest expense |
|
|
228 |
|
|
|
334 |
|
|
753 |
|
|
929 |
Income (loss) before income taxes |
|
|
(1,784 |
) |
|
|
6,822 |
|
|
10,944 |
|
|
20,559 |
Income taxes |
|
|
1,378 |
|
|
|
2,590 |
|
|
6,191 |
|
|
7,890 |
Net (loss) income |
|
$ |
(3,162 |
) |
|
$ |
4,232 |
|
$ |
4,753 |
|
$ |
12,669 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.18 |
) |
|
$ |
0.24 |
|
$ |
0.27 |
|
$ |
0.71 |
|
Diluted |
|
$ |
(0.18 |
) |
|
$ |
0.24 |
|
$ |
0.27 |
|
$ |
0.71 |
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
17,830,813 |
|
|
|
17,732,715 |
|
|
17,794,803 |
|
|
17,719,005 |
|
Diluted |
|
|
17,830,813 |
|
|
|
17,814,499 |
|
|
17,891,942 |
|
|
17,811,844 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend declared per share |
|
$ |
0.11 |
|
|
$ |
0.09 |
|
$ |
0.31 |
|
$ |
0.27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying Notes are an integral part of these
Consolidated Financial Statements.
|
|
HOUSTON WIRE & CABLE COMPANY |
|
Consolidated Statements of Cash Flows |
|
(Unaudited) |
|
(In thousands) |
|
|
|
|
|
Nine Months Ended September 30, |
|
|
|
2013 |
|
|
2012 |
|
|
|
|
|
|
|
|
|
|
Operating activities |
|
|
|
|
|
|
|
|
Net income |
|
$ |
4,753 |
|
|
$ |
12,669 |
|
Adjustments to reconcile net income to net cash
provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
|
Impairment of goodwill |
|
|
7,562 |
|
|
|
-- |
|
|
Depreciation and amortization |
|
|
2,244 |
|
|
|
2,194 |
|
|
Amortization of capitalized loan costs |
|
|
14 |
|
|
|
14 |
|
|
Amortization of unearned stock compensation |
|
|
669 |
|
|
|
809 |
|
|
Provision for doubtful accounts |
|
|
(59 |
) |
|
|
(19 |
) |
|
Provision for returns and allowances |
|
|
30 |
|
|
|
(44 |
) |
|
Provision for inventory obsolescence |
|
|
397 |
|
|
|
563 |
|
|
Deferred income taxes |
|
|
(1,416 |
) |
|
|
(640 |
) |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(1,059 |
) |
|
|
(7,282 |
) |
|
|
Inventories |
|
|
4,029 |
|
|
|
(20,163 |
) |
|
|
Prepaids |
|
|
(102 |
) |
|
|
(41 |
) |
|
|
Other
assets |
|
|
(22 |
) |
|
|
91 |
|
|
|
Book
overdraft |
|
|
4,039 |
|
|
|
1,228 |
|
|
|
Trade
accounts payable |
|
|
1,669 |
|
|
|
3,161 |
|
|
|
Accrued and other current liabilities |
|
|
(2,615 |
) |
|
|
(5,706 |
) |
|
|
Income taxes |
|
|
(557 |
) |
|
|
1,542 |
|
|
|
Other
long term obligations |
|
|
(5 |
) |
|
|
(17 |
) |
Net cash provided by (used in) operating
activities |
|
|
19,571 |
|
|
|
(11,641 |
) |
|
|
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
|
|
|
|
Expenditures for property and equipment |
|
|
(782 |
) |
|
|
(718 |
) |
Net cash used in investing activities |
|
|
(782 |
) |
|
|
(718 |
) |
|
|
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
|
|
|
|
Borrowings on revolver |
|
|
287,223 |
|
|
|
302,142 |
|
|
Payments on revolver |
|
|
(301,286 |
) |
|
|
(285,116 |
) |
|
Proceeds from exercise of stock options |
|
|
471 |
|
|
|
137 |
|
|
Excess tax benefit for stock options |
|
|
44 |
|
|
|
34 |
|
|
Payment of dividends |
|
|
(5,509 |
) |
|
|
(4,781 |
) |
|
Purchase of treasury stock |
|
|
(6 |
) |
|
|
(57 |
) |
Net cash (used in) provided by financing
activities |
|
|
(19,063 |
) |
|
|
12,359 |
|
|
|
|
|
|
|
|
|
|
Net change in cash |
|
|
(274 |
) |
|
|
-- |
|
Cash at beginning of period |
|
|
274 |
|
|
|
-- |
|
|
|
|
|
|
|
|
|
|
Cash at end of period |
|
$ |
-- |
|
|
$ |
-- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying Notes are an integral part of these
Consolidated Financial Statements.
Non-GAAP Financial Disclosures and Reconciliations While the
Company reports financial results in accordance with U.S. GAAP,
this press release includes non-GAAP measures. We use the non-GAAP
measures to evaluate and manage our operations and provide the
information to assist investors in performing financial analysis
that is consistent with financial models developed by research
analysts. Investors should consider non-GAAP measures in addition
to, not as a substitute for, or as superior to, measures of
financial performance prepared in accordance with GAAP.
|
|
HOUSTON WIRE & CABLE COMPANY |
|
Reconciliation of Non-GAAP Measures |
|
(Unaudited) |
|
(In thousands, except per share data) |
|
|
|
Adjusted net income and adjusted diluted EPS |
|
Three Months Ended September 30, 2013 |
|
|
|
Net Income |
|
|
Diluted EPS |
|
|
|
|
|
|
|
|
|
|
Net
income, as reported under GAAP |
|
$ |
(3,162 |
) |
|
$ |
(0.18 |
) |
Goodwill impairment |
|
|
7,562 |
|
|
|
0.43 |
|
|
|
|
4,440 |
|
|
|
0.25 |
|
Tax
effect of goodwill impairment |
|
|
(870 |
) |
|
|
(0.05 |
) |
Adjusted net income |
|
$ |
3,530 |
|
|
$ |
0.20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income and adjusted diluted EPS |
|
Nine Months Ended September 30, 2013 |
|
|
|
Net Income |
|
|
Diluted EPS * |
|
|
|
|
|
|
|
|
|
|
Net
income, as reported under GAAP |
|
$ |
4,753 |
|
|
$ |
0.27 |
|
Goodwill impairment |
|
|
7,562 |
|
|
|
0.43 |
|
|
|
|
12,315 |
|
|
|
0.70 |
|
Tax
effect of goodwill impairment |
|
|
(870 |
) |
|
|
(0.05 |
) |
Adjusted net income |
|
$ |
11,445 |
|
|
$ |
0.64 |
|
|
|
|
|
|
|
|
|
|
* Due
to rounding, EPS amounts do not add in total. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
CONTACT: Nicol G. Graham Chief Financial Officer Direct:
713.609.2125 Fax: 713.609.2168 ngraham@houwire.com
Grafico Azioni Houston Wire and Cable (NASDAQ:HWCC)
Storico
Da Giu 2024 a Lug 2024
Grafico Azioni Houston Wire and Cable (NASDAQ:HWCC)
Storico
Da Lug 2023 a Lug 2024