HOUSTON, Nov. 9, 2009 (GLOBE NEWSWIRE) -- Houston Wire & Cable Company (Nasdaq:HWCC) (the "Company") announced results for the third quarter of 2009.
Selected highlights are:
* Sequential quarterly sales growth was 2.7% * Operating cash flow was $17.8 million for the year-to-date period * Fully diluted earnings per share (EPS) was $0.13 for the quarter * Debt was reduced by 44% on a trailing twelve month basis * Four year Loan Agreement was executed * The Company approved a quarterly dividend of $0.085 per share
Sales in the third quarter of 2009 were $63.6 million, up 2.7% from the second quarter of 2009 but down 35.7% when compared to the third quarter of 2008. The sales decline from 2008 was due to the current economic conditions which curtailed product demand and average copper prices, which were 20% lower. The decrease in copper prices is estimated to have accounted for almost one-half of the sales decline. Sales in both the Repair and Replacement sector also referred to as Maintenance Repair and Operations ("MRO") and within our five growth initiatives, Emission Controls, Engineering & Construction, Industrials, LifeGuard and Utility Power Generation decreased from the prior year period. After adjusting for copper deflation, we estimate that our MRO business declined between 10-20%, while sales from our growth initiatives were essentially flat.
Despite a tough operating environment, gross margins reached 21.2% slightly higher than the 21.0% level achieved in the second quarter of 2009.
The results of reducing operating expenses and streamlining workflow continued during the third quarter. These actions resulted in a 16.6% reduction in operating expenses compared to the third quarter of 2008. On a sequential basis operating expenses were also reduced, by 1.8%. Operating income and net income for the third quarter of 2009 were both down approximately 66% from the third quarter of 2008, primarily as a result of the reduction in gross profit dollars from the decreased sales level and a gross margin reduction.
Chuck Sorrentino, President & CEO commented, "We continue to be faced with weakened industrial demand due to depressed economic conditions, but are pleased to have experienced a slight increase in sequential sales during the quarter. Operating expenses have now reached their lowest level since our IPO in 2006. In spite of the business conditions net income for the third quarter was up 21% sequentially. We continue to remain focused on market share gains and added approximately 50 new customers in the third quarter of 2009.
"I am pleased that we managed to renew our credit facility which will provide us with sufficient capital to grow the business, including selective acquisitions, should the right opportunities present themselves.
"The continued success of the Company, despite uncooperative market conditions, could not have been achieved without the tireless work of our team members, our directors and advisors. I'd like to thank them all for their collective support and contributions."
Conference Call
The Company will host a conference call to discuss third quarter results on Monday, November 9, 2009 at 10:00 am CT. Hosting the call will be Charles Sorrentino, 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. A replay of this webcast will be available until December 9, 2009. Approximately two hours after the completion of the live call, a telephone replay will be available until November 16, 2009.
Replay Dial In: 888-203-1112 International Replay: 719-457-0820 Confirmation Code: 4761115
About the Company
With more than 30 years experience in the electrical industry, Houston Wire & Cable Company is one of the largest distributors of specialty wire and cable and related services in the U.S. electrical distribution market. Headquartered in Houston, Texas, HWCC has sales and distribution facilities in Atlanta, Baton Rouge, Charlotte, Chicago, Denver, Houston, Los Angeles, Philadelphia, San Francisco, Seattle and Tampa.
Standard stock items available for immediate delivery include continuous and interlocked armor, instrumentation, medium voltage, high temperature, portable cord, power cables and private branded products, including LifeGuard(TM), a low-smoke, zero-halogen cable. HWCC's 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.
The Houston Wire & Cable Company logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=2807
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.
Risk factors that may cause actual results to differ materially from statements made in this press release can be found in the MD&A Section of the Company's Annual Report on Form 10-K for the period ended December 31, 2008, filed with the SEC on March 16, 2009. This document and other SEC filings 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)
Sept. 30, Dec. 31,
2009 2008
---------- ----------
(unaudited)
Assets
Current assets:
Accounts receivable, net $ 42,169 $ 50,798
Inventories, net 71,948 73,459
Deferred income taxes 1,674 1,591
Prepaid expenses 817 829
--------- ---------
Total current assets 116,608 126,677
--------- ---------
Property and equipment, net 3,114 3,274
Goodwill 2,362 2,362
Deferred income taxes 2,757 2,353
Other assets 28 87
--------- ---------
Total assets $ 124,869 $ 134,753
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Liabilities and stockholders' equity
Current liabilities:
Book overdraft $ 1,656 $ 4,933
Trade accounts payable 13,940 10,091
Accrued and other current liabilities 12,297 11,682
Income taxes payable 344 1,644
--------- ---------
Total current liabilities 28,237 28,350
--------- ---------
Long term obligations 16,707 29,808
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:
17,652,737 and 17,642,552 outstanding at
September 30, 2009 and December 31, 2008,
respectively 21 21
Additional paid-in-capital 57,414 55,901
Retained earnings 77,190 75,540
Treasury stock (54,700) (54,867)
--------- ---------
Total stockholders' equity 79,925 76,595
--------- ---------
Total liabilities and stockholders' equity $ 124,869 $ 134,753
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HOUSTON WIRE & CABLE COMPANY
Consolidated Statements of Income
(Unaudited)
(In thousands, except share and per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------- -----------------------
2009 2008 2009 2008
----------- ----------- ----------- -----------
Sales $ 63,579 $ 98,854 $ 191,293 $ 285,679
Cost of sales 50,117 76,214 151,046 216,141
----------- ----------- ----------- -----------
Gross profit 13,462 22,640 40,247 69,538
Operating expenses:
Salaries and
commissions 5,143 6,159 15,882 18,330
Other operating
expenses 4,395 5,302 13,527 15,287
Depreciation and
amortization 138 136 421 392
----------- ----------- ----------- -----------
Total operating
expenses 9,676 11,597 29,830 34,009
----------- ----------- ----------- -----------
Operating income 3,786 11,043 10,417 35,529
Interest expense 140 472 403 1,463
----------- ----------- ----------- -----------
Income before income
taxes 3,646 10,571 10,014 34,066
Income taxes 1,405 3,996 3,864 13,009
----------- ----------- ----------- -----------
Net income $ 2,241 $ 6,575 $ 6,150 $ 21,057
=========== =========== =========== ===========
Earnings per share:
Basic $ 0.13 $ 0.37 $ 0.35 $ 1.18
=========== =========== =========== ===========
Diluted $ 0.13 $ 0.37 $ 0.35 $ 1.18
=========== =========== =========== ===========
Weighted average
common shares
outstanding:
Basic 17,651,074 17,676,468 17,647,334 17,839,160
=========== =========== =========== ===========
Diluted 17,666,284 17,704,818 17,659,425 17,874,238
=========== =========== =========== ===========
Dividends declared
per share $ 0.085 $ 0.085 $ 0.255 $ 0.255
=========== =========== =========== ===========
HOUSTON WIRE & CABLE COMPANY
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
Nine Months Ended
September 30,
----------------------
2009 2008
---------- ----------
Operating activities
Net income $ 6,150 $ 21,057
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 421 392
Amortization of capitalized loan costs 91 60
Amortization of unearned stock compensation 1,699 1,570
Provision for doubtful accounts -- 114
Provision for returns and allowances (106) 33
Provision for inventory obsolescence 366 (43)
Deferred income taxes (541) (545)
Changes in operating assets and liabilities:
Accounts receivable 8,735 (8,578)
Inventories 1,145 (1,711)
Prepaid expenses 12 (139)
Other assets (31) (53)
Book overdraft (3,277) 252
Trade accounts payable 3,849 4,141
Accrued and other current liabilities 615 (3,484)
Income taxes payable/receivable (1,300) 1,293
---------- ----------
Net cash provided by operating activities 17,828 14,359
Investing activities
Expenditures for property and equipment (262) (384)
---------- ----------
Net cash used in investing activities (262) (384)
Financing activities
Borrowings on revolver 193,524 289,165
Payments on revolver (206,625) (283,472)
Proceeds from exercise of stock options 22 57
Excess tax benefit for stock options 13 264
Payment of dividends (4,500) (4,544)
Purchase of treasury stock -- (15,445)
---------- ----------
Net cash used in financing activities (17,566) (13,975)
---------- ----------
Net change in cash -- --
Cash at beginning of period -- --
---------- ----------
Cash at end of period $ -- $ --
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