Houston Wire & Cable Company Reports Results for the First Quarter of 2013

Increases Dividend by 22.2%

Marketwired

HOUSTON, TX--(Marketwired - May 9, 2013) - Houston Wire & Cable Company (NASDAQ: HWCC) (the "Company") announced operating results for the first quarter ended March 31, 2013.

Selected highlights were:

  • Sales of $94.3 million
  • Record operating cash flow of $12.0 million
  • Net income of $3.9 million
  • Diluted EPS of $0.22 per share
  • Declared a dividend of $0.11 per share
  • Debt falls to lowest level since 2011

Jim Pokluda, President and Chief Executive Officer commented, "Inconsistent market conditions, and varying levels of regional performance generated sales which grew approximately 2% over the prior year period when adjusted for the reduction in the price of metals. Weakness in certain geographic regions was offset by strong demand in upstream and midstream oil and gas markets and increased industrial demand in the Gulf Coast region. Overall, MRO demand was up slightly while project activity was down slightly." 

"Sales of recently introduced new products such as specialty oil and gas cables and aluminum cables continued to drive performance. Operating cash flow was solid and debt reduction exceeded expectations. Similar to prior quarters, our largest markets performed well and we remain positive in our view that sales and profitability will continue to slowly improve throughout the year. 

Gross margin increased to 22.7% as a result of a change in product sales mix. Operating expenses were up $0.7 million or 4.6%, due primarily to additional headcount, principally in sales and marketing. This increase compressed operating margins, which fell to 6.8%, down 40 basis points from 2012.

Interest expense of $0.3 million was flat with the prior year period. An 18% reduction in outstanding debt reduced the balance to its lowest quarterly level since December 2011. The average effective interest rate declined by 9.5%, from 2.1% in 2012 to 1.9% in 2013. 

Net income of $3.9 million decreased by 3.8% or $0.2 million from the first quarter of 2012. Diluted earnings per share were $0.22 compared to $0.23 in the comparative year period.

Pokluda further commented, "We are very pleased our strong balance sheet and solid financial performance allowed us to increase our dividend 22.2% to $0.11 per share."

Conference Call
The Company will host a conference call to discuss first quarter results today, Thursday, May 9, 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 May 16, 2013.

Replay, Toll-Free #: (855) 859-2056
Replay, Toll #: (404) 537-3406
Conference ID # 59574627

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)
 
  March 31,     December 31,  
  2013     2012  
  (unaudited)        
Assets              
Current assets:              
  Cash $ --     $ 274  
  Accounts receivable, net   59,218       65,892  
  Inventories, net   81,767       84,662  
  Deferred income taxes   2,631       2,455  
  Prepaids   1,125       841  
Total current assets   144,741       154,124  
               
Property and equipment, net   5,787       5,824  
Intangible assets, net   11,533       11,967  
Goodwill   25,082       25,082  
Other assets   143       158  
Total assets $ 187,286     $ 197,155  
               
Liabilities and stockholders' equity              
Current liabilities:              
  Book overdraft $ 3,855     $ --  
  Trade accounts payable   10,481       12,330  
  Accrued and other current liabilities   9,126       15,379  
  Income taxes   2,481       5  
Total current liabilities   25,943       27,714  
               
Debt   48,010       58,588  
Other long term obligations   103       103  
Deferred income taxes   1,534       1,670  
Total liabilities   75,590       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: 17,910,794 and 17,899,499 outstanding at March 31, 2013 and December 31, 2012, respectively   21       21  
  Additional paid-in-capital   55,475       55,291  
  Retained earnings   106,499       104,252  
  Treasury stock   (50,299 )     (50,484 )
Total stockholders' equity   111,696       109,080  
Total liabilities and stockholders' equity $ 187,286     $ 197,155  
               
 
 
HOUSTON WIRE & CABLE COMPANY
Consolidated Statements of Income
(Unaudited)
(In thousands, except share and per share data)
 
  Three Months Ended
  March 31,
  2013   2012
           
Sales $ 94,304   $ 94,462
Cost of sales   72,925     73,324
Gross profit   21,379     21,138
           
Operating expenses:          
  Salaries and commissions   7,967     7,229
  Other operating expenses   6,281     6,374
  Depreciation and amortization   745     733
Total operating expenses   14,993     14,336
           
Operating income   6,386     6,802
Interest expense   273     266
Income before income taxes   6,113     6,536
Income taxes   2,251     2,520
Net income $ 3,862   $ 4,016
           
Earnings per share:          
  Basic $ 0.22   $ 0.23
  Diluted $ 0.22   $ 0.23
Weighted average common shares outstanding:          
  Basic   17,752,682     17,698,600
  Diluted   17,845,442     17,814,902
           
Dividend declared per share $ 0.09   $ 0.09
           
 
 
HOUSTON WIRE & CABLE COMPANY
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
 
  Three Months
Ended March 31,
 
  2013     2012  
               
Operating activities              
Net income $ 3,862     $ 4,016  
Adjustments to reconcile net income to net cash provided by (used in) operating activities:              
  Depreciation and amortization   745       733  
  Amortization of capitalized loan costs   5       5  
  Amortization of unearned stock compensation   245       268  
  Provision for doubtful accounts   (59 )     9  
  Provision for returns and allowances   25       (96 )
  Provision for inventory obsolescence   210       158  
  Deferred income taxes   (312 )     (108 )
  Changes in operating assets and liabilities:              
    Accounts receivable   6,708       (5,146 )
    Inventories   2,685       (12,291 )
    Prepaids   (284 )     (201 )
    Other assets   10       (2 )
    Book overdraft   3,855       3,316  
    Trade accounts payable   (1,849 )     4,708  
    Accrued and other current liabilities   (6,272 )     (2,941 )
    Income taxes payable   2,475       2,564  
    Other long term obligations   --       (3 )
Net cash provided by (used in) operating activities   12,049       (5,011 )
               
Investing activities              
  Expenditures for property and equipment   (274 )     (101 )
Net cash used in investing activities   (274 )     (101 )
               
Financing activities              
  Borrowings on revolver   94,696       94,060  
  Payments on revolver   (105,274 )     (87,466 )
  Proceeds from exercise of stock options   122       137  
  Excess tax benefit for stock options   5       28  
  Payment of dividends   (1,596 )     (1,593 )
  Purchase of treasury stock   (2 )     (54 )
Net cash (used in) provided by financing activities   (12,049 )     5,112  
               
Net change in cash   (274 )     --  
Cash at beginning of period   274       --  
               
Cash at end of period $ --     $ --  
Contact:
CONTACT:
Nicol G. Graham
Chief Financial Officer
Direct: 713.609.2125
Fax: 713.609.2168
ngraham@houwire.com
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