Houston Wire & Cable Company Reports Results for the Quarter
Ended December 31, 2013
HOUSTON, TX--(Marketwired - Mar 13, 2014) - Houston Wire &
Cable Company (NASDAQ: HWCC) (the "Company") announced operating
results for the fourth quarter and year ended December 31,
2013.
Selected results were:
- Sales of $94.4 million
- Net income of $3.1 million
- Diluted EPS of $0.18
- Declared a dividend of $0.11 per share
Selected highlights for 2013:
- Metals adjusted sales flat with 2012
- Diluted EPS of $0.44, or $0.82 excluding the goodwill
impairment
- Declared dividends totaling $0.42 per share
- Operating cash flow of $20.7 million
- Debt to equity ratio of 43.3%
Fourth Quarter Summary Jim Pokluda, President and Chief
Executive Officer commented, "The inconsistent market strength
trends experienced in the first three quarters of the year
continued in the fourth quarter. As a result, our fourth
quarter year-over-year results were again mixed as we experienced
an increase in Maintenance, Repair and Operations (MRO) sales of
just over 3%, or approximately 6% on a metals adjusted basis, but a
project sales decrease of approximately 30%, or 27% on a metals
adjusted basis. Total sales, on a metals adjusted basis, fell
approximately 7% from Q4 2012."
Despite the continued overall competitiveness of the
marketplace, varying levels of market demand, and softening metals
prices, gross margin at 21.8% was near flat sequentially and up 70
basis points over the prior year period, which contained a greater
amount of low margin project sales. Operating expenses were up 4.4%
compared to Q4 2012, primarily due to headcount related expenses
and the costs of expanding the distribution network.
Interest expense of $0.2 million was down from the $0.3 million
in the prior year period. Average debt levels fell by 23.8%
from $60.8 million in 2012 to $46.3 million in 2013, and the
effective interest rate declined from 2.0% in 2012 to 1.9% in
2013. The effective tax rate for the quarter of 39.1% was up
slightly from the 2012 tax rate of 38.6% due to higher state tax
rates.
Net income of $3.1 million decreased 27.9% from the fourth
quarter of 2012. Diluted earnings per share was $0.18 compared to
$0.25 in the prior year quarter.
Twelve month summary Sales for the year were $383.3 million or
essentially flat with 2012 on a metals adjusted basis. We
estimate that metals adjusted MRO sales increased 7%, while project
sales decreased 14%. Mr. Pokluda commented, "We were
encouraged by the continued growth of our MRO sales, which is the
largest component of overall revenues, but disappointed with our
project sales results, which have been a function of ongoing delays
and lack of industry investment in large capital
projects. While certain industries such as oil and gas are
outside of this trend, many industries have adopted conservative
capital allocation strategies which favor high levels of plant
utilization over more aggressive strategies which have
traditionally involved new plant construction, expansion and
investment. We continue to see large regional demand
variances, with the West and Central the least active, the
Northeast and Southeast showing signs of recovery, and the Gulf
Coast extremely busy. Until we see activity levels in the
underperforming regions improve, our sales and net income results
will be constrained."
Gross margin was flat with 2012. "Considering the continuing
competitive pricing environment, I was pleased that we managed to
maintain margins at their present level. Our 7% MRO volume gains
helped to support overall company margins," said Mr.
Pokluda.
Operating expenses increased 16.3%, primarily as a result of the
$7.6 million impairment of goodwill on the Southern Wire reporting
unit. Excluding the impairment charge, operating expenses increased
by 3.3% or $1.9 million in the current year, primarily due to the
impact of the higher headcount and higher operating expenses
related to additional facilities and higher inventory
levels. Mr. Pokluda further commented, "We have taken steps to
reduce the level of operating expenses, including a reduction in
headcount, which we expect to save approximately $1.0 million to
$1.5 million on an annual basis."
Interest expense of $1.0 million was lower than the prior year's
$1.3 million as average debt levels fell by 17.5% from $58.0
million in 2012 to $47.8 million in 2013 and interest rates
decreased from 2.1% to 1.9%. The effective tax rate, excluding the
impairment of goodwill, was 38.4% unchanged from 2012.
Net income for 2013 was $7.9 million, or $14.6 million excluding
the impairment of goodwill. Adjusted net income fell 14.4% from the
$17.0 million level in the prior year.
Conference Call The Company will host a conference call to
discuss fourth quarter results on Thursday, March 13, 2014 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 March 20, 2014.
Replay, Toll-Free #: 855-859-2056 Replay, Toll #: 404-537-3406
Conference ID # 9507440
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 |
Consolidated Balance Sheets |
|
|
|
December 31, |
|
|
|
2013 |
|
|
2012 |
|
|
|
(In thousands, except share data) |
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
Cash |
|
$ |
-- |
|
|
$ |
274 |
|
|
Accounts receivable, net |
|
|
60,408 |
|
|
|
65,892 |
|
|
Inventories, net |
|
|
96,107 |
|
|
|
84,662 |
|
|
Deferred income taxes |
|
|
2,591 |
|
|
|
2,455 |
|
|
Income taxes |
|
|
420 |
|
|
|
-- |
|
|
Prepaids |
|
|
762 |
|
|
|
841 |
|
Total current assets |
|
|
160,288 |
|
|
|
154,124 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
7,974 |
|
|
|
5,824 |
|
Intangible assets, net |
|
|
10,234 |
|
|
|
11,967 |
|
Goodwill |
|
|
17,520 |
|
|
|
25,082 |
|
Other assets |
|
|
159 |
|
|
|
158 |
|
Total assets |
|
$ |
196,175 |
|
|
$ |
197,155 |
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
Book
overdraft |
|
$ |
4,594 |
|
|
$ |
-- |
|
|
Trade
accounts payable |
|
|
13,637 |
|
|
|
12,330 |
|
|
Accrued and other current liabilities |
|
|
18,772 |
|
|
|
15,379 |
|
|
Income taxes |
|
|
-- |
|
|
|
5 |
|
Total current liabilities |
|
|
37,003 |
|
|
|
27,714 |
|
|
|
|
|
|
|
|
|
|
Debt |
|
|
47,952 |
|
|
|
58,588 |
|
Other long-term obligations |
|
|
97 |
|
|
|
103 |
|
Deferred income taxes |
|
|
429 |
|
|
|
1,670 |
|
Total liabilities |
|
|
85,481 |
|
|
|
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: 17,954,032 and 17,899,499 shares
outstanding at December 31, 2013 and 2012, respectively |
|
|
21 |
|
|
|
21 |
|
|
Additional paid-in capital |
|
|
55,642 |
|
|
|
55,291 |
|
|
Retained earnings |
|
|
104,607 |
|
|
|
104,252 |
|
|
Treasury stock |
|
|
(49,576 |
) |
|
|
(50,484 |
) |
Total stockholders' equity |
|
|
110,694 |
|
|
|
109,080 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity |
|
$ |
196,175 |
|
|
$ |
197,155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Houston Wire & Cable Company |
Consolidated Statements of Income |
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
|
(In thousands, except share and per share data) |
|
|
|
|
|
|
|
|
|
Sales |
|
$ |
94,442 |
|
$ |
104,379 |
|
$ |
383,292 |
|
$ |
393,036 |
Cost of sales |
|
|
73,809 |
|
|
82,362 |
|
|
298,633 |
|
|
306,017 |
Gross profit |
|
|
20,633 |
|
|
22,017 |
|
|
84,659 |
|
|
87,019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and commissions |
|
|
7,558 |
|
|
7,611 |
|
|
30,946 |
|
|
30,013 |
|
Other
operating expenses |
|
|
6,933 |
|
|
6,221 |
|
|
26,068 |
|
|
25,139 |
|
Depreciation and amortization |
|
|
734 |
|
|
747 |
|
|
2,978 |
|
|
2,941 |
|
Impairment of goodwill |
|
|
-- |
|
|
-- |
|
|
7,562 |
|
|
-- |
Total operating expenses |
|
|
15,225 |
|
|
14,579 |
|
|
67,554 |
|
|
58,093 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
5,408 |
|
|
7,438 |
|
|
17,105 |
|
|
28,926 |
Interest expense |
|
|
239 |
|
|
323 |
|
|
992 |
|
|
1,252 |
Income before income taxes |
|
|
5,169 |
|
|
7,115 |
|
|
16,113 |
|
|
27,674 |
Income taxes |
|
|
2,020 |
|
|
2,745 |
|
|
8,211 |
|
|
10,635 |
Net income |
|
$ |
3,149 |
|
$ |
4,370 |
|
$ |
7,902 |
|
$ |
17,039 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.18 |
|
$ |
0.25 |
|
$ |
0.44 |
|
$ |
0.96 |
|
Diluted |
|
$ |
0.18 |
|
$ |
0.25 |
|
$ |
0.44 |
|
$ |
0.96 |
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
17,837,097 |
|
|
17,735,998 |
|
|
17,805,464 |
|
|
17,723,277 |
|
Diluted |
|
|
17,937,992 |
|
|
17,825,976 |
|
|
17,900,372 |
|
|
17,815,401 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend declared per share |
|
$ |
0.11 |
|
$ |
0.09 |
|
$ |
0.42 |
|
$ |
0.36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Houston Wire & Cable Company |
Consolidated Statements of Cash Flows |
|
|
|
Year Ended December 31, |
|
|
2013 |
|
|
2012 |
|
|
|
(In thousands) |
Operating activities |
|
|
|
|
|
|
|
|
Net income |
|
$ |
7,902 |
|
|
$ |
17,039 |
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net income to net cash
provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
|
Impairment of goodwill |
|
|
7,562 |
|
|
|
-- |
|
|
Depreciation and amortization |
|
|
2,978 |
|
|
|
2,941 |
|
|
Amortization of capitalized loan costs |
|
|
18 |
|
|
|
18 |
|
|
Amortization of unearned stock compensation |
|
|
900 |
|
|
|
1,040 |
|
|
Provision for doubtful accounts |
|
|
(59 |
) |
|
|
(19 |
) |
|
Provision for returns and allowances |
|
|
27 |
|
|
|
(61 |
) |
|
Provision for inventory obsolescence |
|
|
559 |
|
|
|
815 |
|
|
(Gain) loss on disposals of property and equipment |
|
|
(1 |
) |
|
|
(7 |
) |
|
Deferred income taxes |
|
|
(1,485 |
) |
|
|
(773 |
) |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
5,516 |
|
|
|
(6,081 |
) |
|
|
Inventories |
|
|
(12,004 |
) |
|
|
(15,960 |
) |
|
|
Prepaids |
|
|
79 |
|
|
|
(13 |
) |
|
|
Other
assets |
|
|
(19 |
) |
|
|
129 |
|
|
|
Book
overdraft |
|
|
4,594 |
|
|
|
(2,270 |
) |
|
|
Trade
accounts payable |
|
|
1,307 |
|
|
|
2,231 |
|
|
|
Accrued and other current liabilities |
|
|
3,312 |
|
|
|
(3,722 |
) |
|
|
Long
term liabilities |
|
|
(6 |
) |
|
|
(25 |
) |
|
|
Income taxes |
|
|
(435 |
) |
|
|
1,685 |
|
Net cash provided by (used in) operating
activities |
|
|
20,745 |
|
|
|
(3,033 |
) |
|
|
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
|
|
|
|
Expenditures for property and equipment |
|
|
(3,396 |
) |
|
|
(1,005 |
) |
|
Proceeds from disposals of property and equipment |
|
|
2 |
|
|
|
9 |
|
|
Cash paid for acquisition |
|
|
-- |
|
|
|
-- |
|
Net cash used in investing activities |
|
|
(3,394 |
) |
|
|
(996 |
) |
|
|
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
|
|
|
|
Borrowings on revolver |
|
|
396,724 |
|
|
|
402,231 |
|
|
Payments on revolver |
|
|
(407,360 |
) |
|
|
(391,610 |
) |
|
Deferred loan cost |
|
|
-- |
|
|
|
-- |
|
|
Proceeds from exercise of stock options |
|
|
492 |
|
|
|
137 |
|
|
Payment of dividends |
|
|
(7,466 |
) |
|
|
(6,375 |
) |
|
Excess tax benefit for options |
|
|
49 |
|
|
|
35 |
|
|
Purchase of treasury stock |
|
|
(64 |
) |
|
|
(115 |
) |
Net cash (used in) provided by financing
activities |
|
|
(17,625 |
) |
|
|
4,303 |
|
|
|
|
|
|
|
|
|
|
Net change in cash |
|
|
(274 |
) |
|
|
274 |
|
Cash at beginning of year |
|
|
274 |
|
|
|
-- |
|
|
|
|
|
|
|
|
|
|
Cash at end of year |
|
$ |
-- |
|
|
$ |
274 |
|
Supplemental disclosures |
|
|
|
|
|
|
|
|
|
Cash paid during the year for interest |
|
$ |
998 |
|
|
$ |
1,231 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid during the year for income taxes |
|
$ |
10,236 |
|
|
$ |
9,762 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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