Market Overview

Houston Wire & Cable Company Reports Results for the Quarter Ended June 30, 2018


HOUSTON, Aug. 09, 2018 (GLOBE NEWSWIRE) -- Houston Wire & Cable Company (NASDAQ:HWCC) (the "Company") announced operating results for the second quarter ended June 30, 2018.

Second Quarter 2018 Highlights

  • Net income of $2.6 million, or $0.16 per diluted share
  • Sales of $93.9 million up 24.1% over 2017
  • Gross margin of 23.8% up 220 basis points from the comparable quarter in 2017
  • Operating income of $4.4 million compared to a loss of $0.2 million in the second quarter of 2017

Second Quarter Summary
Houston Wire & Cable Company reported net income of $2.6 million, or $0.16 per diluted share, for the quarter ended June 30, 2018, compared to a net loss of $0.1 million, or zero cents loss per diluted share, for the same quarter in 2017.  Operating income in the second quarter 2018 was $4.4 million compared to an operating loss of $0.2 million during the second quarter of 2017.

Jim Pokluda, President and Chief Executive Officer, commented, "We were pleased to post our fourth consecutive quarter of year-over-year revenue growth, as the upward momentum we experienced in the first quarter of 2018 continued into the second quarter. We estimate sales for our project business, which targets end markets for Utility Power Generation, Environmental Compliance, Engineering & Construction, Industrials, and Mechanical Wire Rope, increased 26%, while Maintenance, Repair, and Operations (MRO) sales were up 23% as compared to the second quarter of 2017."

Gross margin at 23.8% increased 220 basis points from the second quarter of 2017, primarily due to higher product margins driven by ongoing pricing discipline and metals inflation. Operating expenses at $18.0 million were up $1.5 million from Q2 2017 and $0.7 million sequentially, as higher sales activity and margins resulted in more sales commissions and warehouse activity. Operating expenses as a percentage of revenue decreased 270 basis points to 19.1% for Q2 2018 and declined 120 basis points sequentially versus Q1 2018.

Average debt levels for the quarter increased 13.7% from $72.6 million in 2017 to $82.5 million in 2018, primarily for working capital to support higher sales activity and commodity price levels, while the effective interest rate increased from 2.7% in 2017 to 3.7% in 2018.

The effective tax rate for the quarter was 28.0% which includes our best estimate of the impact of the 2017 Tax Cuts and Jobs Act.

Mr. Pokluda further commented, "We are encouraged with the continued improvement in sales, the attainment of higher margin levels and our ability to realize operating expense leverage as activity levels continued to increase. This has resulted in the generation of the highest level of operating income since the fourth quarter of 2014."

Conference Call
The Company will host a conference call to discuss fourth quarter results today, Thursday August 9, 2018, at 10:00 a.m., C.D.T.  Hosting the call will be James Pokluda, President and Chief Executive Officer, and Christopher Micklas, 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 at  

Live call dial-in numbers are as follow:
Toll-Free: (800)-936-7954
International: (720)-545-0048
Conference ID # 7667594

Approximately two hours after the completion of the live call, a telephone replay will be available until August 16, 2018.

Replay, Toll-Free #: (855)-859-2056
Replay, Toll #: (404)-537-3406
Conference ID # 7667594

About the Company 

With 43 years of experience in the industry, Houston Wire & Cable Company, an industrial distributor, is a large provider of 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 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

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.

Consolidated Balance Sheets
(In thousands, except share data)

    June 30,     December 31,  
    2018     2017  
Current assets:                
Accounts receivable, net                
  Trade   $ 59,685     $ 51,031  
  Other     3,006       6,365  
Inventories, net     87,819       88,115  
Income taxes     848       449  
Prepaids     1,742       1,938  
Total current assets     153,100       147,898  
Property and equipment, net     11,399       11,355  
Intangible assets, net     11,627       12,015  
Goodwill     22,353       22,353  
Other assets     409       418  
Total assets   $ 198,888     $ 194,039  
Liabilities and stockholders' equity                
Current liabilities:                
Book overdraft   $ 1,312     $ 3,028  
Trade accounts payable     8,010       8,449  
Accrued and other current liabilities     12,301       16,823  
Total current liabilities     21,623       28,300  
Debt     80,149       73,555  
Deferred income taxes     332       414  
Other long term obligations     752       1,026  
Total liabilities     102,856       103,295  
Stockholders' equity:                
Preferred stock, $0.001 par value; 5,000,000 shares authorized, none issued and
Common stock, $0.001 par value; 100,000,000 shares authorized: 20,988,952
  shares issued: 16,526,439 and 16,491,181 outstanding at June 30, 2018 and
  December 31, 2017, respectively
    21       21  
Additional paid-in-capital     54,147       54,006  
Retained earnings     101,889       97,336  
Treasury stock     (60,025 )     (60,619 )
Total stockholders' equity     96,032       90,744  
Total liabilities and stockholders' equity   $ 198,888     $ 194,039  


Consolidated Statements of Operations
(In thousands, except share and per share data)

    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2018     2017     2018     2017  
Sales   $ 93,852  
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