Market Overview

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

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HOUSTON, Nov. 08, 2018 (GLOBE NEWSWIRE) -- Houston Wire & Cable Company (NASDAQ:HWCC) (the "Company") announced operating results for the third quarter ended September 30, 2018.

Third Quarter 2018 Highlights

  • Net income of $2.5 million, or $0.15 per diluted share
  • Reduced debt by $6.7 million
  • Sales of $90.1 million increased 10.9% over 2017
  • Gross margin of 23.8% up 90 basis points compared with 2017

Third Quarter Summary
Houston Wire & Cable Company reported net income of $2.5 million, or $0.15 per diluted share, for the quarter ended September 30, 2018, compared to a net loss of $1.7 million, or a loss of $0.11 per diluted share, for the same quarter in 2017.  Operating income in the third quarter 2018 was $3.0 million compared to $2.0 million during the third quarter of 2017.

Jim Pokluda, President and Chief Executive Officer, commented, "We were pleased to post our fifth consecutive quarter of year-over-year revenue growth, as customer demand and end market strength remained much improved over the prior year. 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 13%, while Maintenance, Repair, and Operations (MRO) sales were up 10%, as compared to the third quarter of 2017."

Gross margin at 23.8% increased 90 basis points from the third quarter of 2017, primarily due to higher product margins driven by ongoing pricing discipline and product mix as metals prices remained relatively consistent year over year. Operating expenses at $18.3 million were up $1.8 million from Q3 2017 and $0.4 million sequentially.  During the quarter, these expenses were elevated by approximately $0.4 million as the Company completed two warehouse moves and one warehouse reorganization. Operating expenses as a percentage of revenue remained relatively flat to 2017 at 20.4%.

Debt for the quarter decreased by $6.7 million to $73.4 million, primarily from increased earnings and improved working capital efficiency, while the effective interest rate increased from 3.7% in the second quarter to 3.8% in the third quarter of 2018.

The effective tax rate for the quarter was a benefit of 6.4%, which included the impact of a release of the Company's $1.0 million valuation allowance established in 2017 and the impact of lower corporate tax rates under the 2017 Tax Cuts and Jobs Act.

Mr. Pokluda further commented, "Our improved year-over-year results are being driven by on-going recovery of end-market activity, customer demand, and excellent execution of our strategic plan.  We are encouraged by these results, and remain laser focused on driving above market performance in the period ahead."   

Conference Call
The Company will host a conference call to discuss fourth quarter results today, Friday, November 9th, 2018, at 10:00 a.m., C.S.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 www.houwire.com.  

Live call dial-in numbers are as follow:
Toll-Free: (800)-936-7954
International: (720)-545-0048
Conference ID # 2295115

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

Replay, Toll-Free #: (855)-859-2056
Replay, Toll #: (404)-537-3406
Conference ID # 2295115

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 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)

    September 30,     December 31,  
    2018     2017  
    (unaudited)         
Assets                
Current assets:                
Accounts receivable, net                
  Trade   $ 60,022     $ 51,031  
  Other     4,981       6,365  
Inventories, net     86,469       88,115  
Income taxes     550       449  
Prepaids     1,622       1,938  
Total current assets     153,644       147,898  
                 
Property and equipment, net     11,522       11,355  
Intangible assets, net     11,433       12,015  
Goodwill     22,353       22,353  
Deferred income taxes     1,123        
Other assets     578       418  
Total assets   $ 200,653     $ 194,039  
                 
Liabilities and stockholders' equity                
Current liabilities:                
Book overdraft   $ 1,728     $ 3,028  
Trade accounts payable     9,350       8,449  
Accrued and other current liabilities     16,517       16,823  
Total current liabilities     27,595       28,300  
                 
Debt     73,403       73,555  
Deferred income taxes           414  
Other long term obligations     784       1,026  
Total liabilities     101,782       103,295  
                 
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: 16,523,439 and 16,491,181 outstanding at September 30, 2018 and December 31, 2017, respectively     21       21  
Additional paid-in-capital   ?
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