Houston Wire & Cable Company (NASDAQ:HWCC) (the “Company”)
announced operating results for the second quarter ended June 30,
2017.
Selected quarterly results were:
- Sales of $75.6 million up 21.1% from the second quarter of
2016
- Organic sales, excluding Vertex, increased 8.1% from the second
quarter of 2016
- Net loss from operations of $0.1 million
Second Quarter SummaryJim Pokluda, President
and Chief Executive Officer commented, “We are encouraged to see
that the year-over-year sales increases experienced in the first
quarter continued into the second quarter. Although we
experienced more volatile demand, which pressured our results
sequentially, the Q2 organic sales increase of 8.1%, which included
an increase of approximately 2% due to the fluctuation of metals
prices, continues to indicate a slow recovery from the
significantly depressed market conditions experienced in the prior
year. Excluding Vertex, we estimate that Maintenance, Repair and
Operations (MRO) sales increased 19% or approximately 17% on a
metals adjusted basis, while project sales decreased 22% or
approximately 24% on a metals adjusted basis. Sales activity at
Vertex at $8.1 million exceeded our expectations and we continue to
invest resources in the business.”
Gross margin at 21.6% increased 170 basis points from the second
quarter of 2016, primarily due to the higher margins generated by
Vertex. Operating expenses at $16.5 million increased compared to
the second quarter of 2016 (excluding the $2.4 million impairment
charge in 2016) by $3.4 million, principally due to the operating
expenses of Vertex and overall higher operating expenses incurred
by the legacy operations.
Interest expense of $0.5 million was up $0.4 million from $0.1
million in the prior year period, due to the additional debt
incurred to purchase Vertex. The increase was also impacted
as average interest rates increased to 2.7% in 2017 from 1.7% in
2016.
The results of operations produced a net loss of $0.1 million,
as compared to a net loss of $2.6 million in 2016. Excluding the
impairment from 2016’s results, the second quarter of 2016 produced
a net loss of $0.7 million.
Mr. Pokluda further commented “Despite the incremental
contribution from Vertex, our performance fell short of our
expectations. Organic demand continues to be weak, especially in
large project activity and for our fabricated products both of
which continue to negatively affect sales, operating margins, and
our bottom line performance. General MRO activity is continuing to
improve, and increased drilling activity has positively impacted
our MRO sales, but the reduced project demand and the absence of
any meaningful offshore drilling activity, is still indicative of
the depressed and overall unpredictable level of industrial
demand.”
Six month summarySales for the six month period
were 21.4% higher than the prior year period and organic sales
(excluding Vertex) increased 8.9%, or approximately 8% on a metals
adjusted basis. We estimate that MRO sales increased 21%, and
project sales decreased 27%, in each case on a metals adjusted
basis.
Mr. Pokluda further commented “The Vertex operation has been
significantly integrated into HWC and as previously announced, I am
pleased to welcome Rich Megliola as its new President. This
operation is well established in the fastener industry and, we
believe, has a sound foundation to produce future success and
results.”
Gross margin at 21.5% was up 120 basis points from the 20.3%
level of the 2016 period and included the impact of Vertex’s higher
margins.
Operating expenses increased $4.7 million from $28.9 million in
2016. Excluding the impairment charge from the prior year,
operating expenses increased $7.1 million.
Interest expense of $0.9 million increased $0.6 million from the
$0.3 million in 2016, mainly due to the additional debt incurred
for the Vertex acquisition. In addition, average interest rates
increased to 2.6% in 2017 from 1.7% in 2016.
The results of operations produced a net loss of $0.5 million,
as compared to a net loss of $2.7 million in 2016. Excluding the
impairment from 2016’s results, 2016 generated a loss of $0.9
million.
Mr. Pokluda further commented “I am delighted that Roy Haley, a
distribution industry expert has agreed to join our board of
directors. Roy’s depth of experience will be a valuable asset to
HWCC going forward.”
Conference CallThe Company will host a
conference call to discuss second quarter results on Wednesday,
August 9, 2017, 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 ir.houwire.com.
Live call dial-in numbers are as follow:Toll-Free: (800)
936-7954International: (720) 545-0048Conference ID # 61811742
Approximately two hours after the completion of the live call, a
telephone replay will be available until August 16, 2017.
Replay, Toll-Free #: (855)859-2056 Replay, Toll #: (404)537-3406
Conference ID # 61811742
About the CompanyWith over 40 years’ experience
in the industry, Houston Wire & Cable Company, an industrial
distributor, is a large provider of industrial products in the U.S
market. Headquartered in Houston, Texas, the Company has sales and
distribution facilities strategically located throughout the United
States.
Standard stock items available for immediate delivery include
continuous and interlocked armor cable; instrumentation cable;
medium voltage cable; high temperature wire; portable cord; power
cable; primary and secondary aluminum distribution cable; 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;
corrosion resistant fasteners, hose clamps, and rivets.
Comprehensive value-added services include same-day shipping,
knowledgeable sales staff, inventory management programs,
just-in-time delivery, logistics support, customized online
ordering capabilities and 24/7/365 service.
Forward-Looking StatementsThis 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
COMPANYConsolidated Balance Sheets(In
thousands, except share data) |
|
|
|
|
|
June 30, |
|
|
December 31, |
|
|
|
2017 |
|
|
2016 |
|
|
|
(unaudited) |
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Accounts
receivable, net |
|
$ |
48,223 |
|
|
$ |
44,677 |
|
Inventories, net |
|
|
78,500 |
|
|
|
79,783 |
|
Income
taxes |
|
|
3,774 |
|
|
|
1,948 |
|
Prepaids |
|
|
1,310 |
|
|
|
570 |
|
Total current
assets |
|
|
131,807 |
|
|
|
126,978 |
|
|
|
|
|
|
|
|
|
|
Property and equipment,
net |
|
|
11,517 |
|
|
|
11,261 |
|
Intangible assets,
net |
|
|
12,404 |
|
|
|
13,378 |
|
Goodwill |
|
|
22,495 |
|
|
|
22,770 |
|
Deferred income
taxes |
|
|
— |
|
|
|
892 |
|
Other assets |
|
|
623 |
|
|
|
591 |
|
Total assets |
|
$ |
178,846 |
|
|
$ |
175,870 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
stockholders' equity |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Book
overdraft |
|
$ |
518 |
|
|
$ |
3,181 |
|
Trade
accounts payable |
|
|
6,274 |
|
|
|
8,406 |
|
Accrued
and other current liabilities |
|
|
11,493 |
|
|
|
13,248 |
|
Total current
liabilities |
|
|
18,285 |
|
|
|
24,835 |
|
|
|
|
|
|
|
|
|
|
Debt |
|
|
69,930 |
|
|
|
60,388 |
|
Other long term
obligations |
|
|
510 |
|
|
|
516 |
|
Total liabilities |
|
|
88,725 |
|
|
|
85,739 |
|
|
|
|
|
|
|
|
|
|
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: 16,487,334 and 16,457,525 outstanding at June 30,
2017 and December 31, 2016, respectively |
|
|
21 |
|
|
|
21 |
|
Additional paid-in-capital |
|
|
53,887 |
|
|
|
53,824 |
|
Retained
earnings |
|
|
97,051 |
|
|
|
97,550 |
|
Treasury
stock |
|
|
(60,838 |
) |
|
|
(61,264 |
) |
Total stockholders'
equity |
|
|
90,121 |
|
|
|
90,131 |
|
Total liabilities and
stockholders' equity |
|
$ |
178,846 |
|
|
$ |
175,870 |
|
HOUSTON WIRE & CABLE
COMPANYConsolidated Statements of
Operations(Unaudited)(In thousands, except share and per
share data) |
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
$ |
75,646 |
|
|
$ |
62,454 |
|
|
$ |
154,355 |
|
|
$ |
127,165 |
|
Cost of sales |
|
|
59,328 |
|
|
|
50,024 |
|
|
|
121,106 |
|
|
|
101,336 |
|
Gross profit |
|
|
16,318 |
|
|
|
12,430 |
|
|
|
33,249 |
|
|
|
25,829 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries
and commissions |
|
|
8,828 |
|
|
|
6,838 |
|
|
|
17,672 |
|
|
|
13,747 |
|
Other
operating expenses |
|
|
6,827 |
|
|
|
5,496 |
|
|
|
14,304 |
|
|
|
11,333 |
|
Depreciation and amortization |
|
|
825 |
|
|
|
774 |
|
|
|
1,685 |
|
|
|
1,466 |
|
Impairment charge |
|
|
— |
|
|
|
2,384 |
|
|
|
— |
|
|
|
2,384 |
|
Total operating
expenses |
|
|
16,480 |
|
|
|
15,492 |
|
|
|
33,661 |
|
|
|
28,930 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
|
(162 |
) |
|
|
(3,062 |
) |
|
|
(412 |
) |
|
|
(3,101 |
) |
Interest expense |
|
|
499 |
|
|
|
149 |
|
|
|
949 |
|
|
|
324 |
|
Loss before income
taxes |
|
|
(661 |
) |
|
|
(3,211 |
) |
|
|
(1,361 |
) |
|
|
(3,425 |
) |
Income tax benefit |
|
|
(607 |
) |
|
|
(654 |
) |
|
|
(854 |
) |
|
|
(684 |
) |
Net loss |
|
$ |
(54 |
) |
|
$ |
(2,557 |
) |
|
$ |
(507 |
) |
|
$ |
(2,741 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.00 |
) |
|
$ |
(0.16 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.17 |
) |
Diluted |
|
$ |
(0.00 |
) |
|
$ |
(0.16 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.17 |
) |
Weighted average common
shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
16,266,342 |
|
|
|
16,383,630 |
|
|
|
16,253,848 |
|
|
|
16,432,376 |
|
Diluted |
|
|
16,266,342 |
|
|
|
16,383,630 |
|
|
|
16,253,848 |
|
|
|
16,432,376 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend declared per
share |
|
$ |
— |
|
|
$ |
0.06 |
|
|
$ |
— |
|
|
$ |
0.12 |
|
HOUSTON WIRE & CABLE
COMPANYConsolidated Statements of Cash
Flows(Unaudited)(In thousands) |
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
Operating
activities |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(507 |
) |
|
$ |
(2,741 |
) |
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities: |
|
|
|
|
|
|
|
|
Impairment charge |
|
|
— |
|
|
|
2,384 |
|
Depreciation and amortization |
|
|
1,685 |
|
|
|
1,466 |
|
Amortization of unearned stock compensation |
|
|
513 |
|
|
|
422 |
|
Provision
for inventory obsolescence |
|
|
111 |
|
|
|
357 |
|
Deferred
income taxes |
|
|
1,033 |
|
|
|
(695 |
) |
Other non-cash items |
|
|
99 |
|
|
|
27 |
|
Changes
in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts
receivable |
|
|
(3,624 |
) |
|
|
4,738 |
|
Inventories |
|
|
1,172 |
|
|
|
10,840 |
|
Book
overdraft |
|
|
(2,663 |
) |
|
|
(3,210 |
) |
Trade
accounts payable |
|
|
(2,132 |
) |
|
|
1,972 |
|
Accrued
and other current liabilities |
|
|
(1,454 |
) |
|
|
(1,757 |
) |
Prepaids |
|
|
(740 |
) |
|
|
(736 |
) |
Income
taxes |
|
|
(1,826 |
) |
|
|
(207 |
) |
Other
operating activities |
|
|
(59 |
) |
|
|
211 |
|
Net cash (used in)
provided by operating activities |
|
|
(8,392 |
) |
|
|
13,071 |
|
|
|
|
|
|
|
|
|
|
Investing
activities |
|
|
|
|
|
|
|
|
Expenditures for property and equipment |
|
|
(1,226 |
) |
|
|
(557 |
) |
Cash
received for acquisition |
|
|
134 |
|
|
|
— |
|
Net cash used in
investing activities |
|
|
(1,092 |
) |
|
|
(557 |
) |
|
|
|
|
|
|
|
|
|
Financing
activities |
|
|
|
|
|
|
|
|
Borrowings on revolver |
|
|
165,025 |
|
|
|
124,312 |
|
Payments
on revolver |
|
|
(155,483 |
) |
|
|
(133,408 |
) |
Payment
of dividends |
|
|
(34 |
) |
|
|
(1,990 |
) |
Purchase
of treasury stock |
|
|
(24 |
) |
|
|
(1,428 |
) |
Net cash provided by
(used in) financing activities |
|
|
9,484 |
|
|
|
(12,514 |
) |
|
|
|
|
|
|
|
|
|
Net change in cash |
|
|
— |
|
|
|
— |
|
Cash at beginning of
period |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
Cash at end of
period |
|
$ |
— |
|
|
$ |
— |
|
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