Houston Wire & Cable Company Reports Results for the Third Quarter of 2014
Solid Third Quarter; Inconsistent Market Demand
(firmenpresse) - HOUSTON, TX -- (Marketwired) -- 11/06/14 -- Houston Wire & Cable Company (NASDAQ: HWCC) (the "Company") announced operating results for the third quarter ended September 30, 2014.
Selected highlights were:
Sales of $96.7 million up 1.6%, or 3% metals adjusted, over Q3 2013
Net income of $3.5 million
Diluted EPS of $0.20 per share
Declared a dividend of $0.12 per share, as announced earlier this week
Jim Pokluda, President and Chief Executive Officer, commented, "We were pleased to post our third consecutive quarter of year-over-year revenue growth despite uneven product demand in our Maintenance, Repair and Operations (MRO) business. Total revenue increased 1.6% over the comparable period and 3% when adjusted for fluctuations in the price of metals. Market conditions remain very competitive and day to day activity is unpredictable and continues to vary by region. While the project pipeline still indicates heavy future investment in a variety of capital projects, commencement dates on a high percentage of the work are being pushed back into 2015 and later years."
"We estimate MRO sales decreased 4%, or approximately 6% on a metals adjusted basis, while project business increased 12%, or approximately 14% on a metals adjusted basis over the prior year quarter. Ongoing activity in upstream oil and gas and general manufacturing markets were the primary drivers of our project growth. We also remain pleased that sales of our new product initiatives, including specialty oil and gas cables and aluminum cables, continued to increase."
Gross margin at 21.8% decreased 20 basis points from the third quarter of 2013 primarily due to higher freight costs and customer incentives. Excluding the $7.6 million goodwill impairment charge from the 2013 amount, operating expenses were up $0.2 million or 1.2% from the prior year period, principally due to higher property taxes and costs incurred at the new distribution locations, but down 10 basis points as a percentage of sales to 15.6%. Pokluda commented, "Disciplined expense management remains a top priority at the Company and on a sequential basis expenses fell by $0.5 million or 2.9%."
Interest expense of $0.3 million was slightly higher than the prior year period, as average debt at $52.1 million increased from $45.6 million at September 30, 2013. The average effective interest rate remained flat at 2.1%. The effective tax rate for the period of 38.4% was lower than the 38.9% rate in the prior year period, due to slightly lower state tax rates in 2014.
Again excluding the impairment charge from 2013 results, net income of $3.5 million was flat with the third quarter of 2013. Diluted earnings per share of $0.20 were consistent with the prior year period. Pokluda further commented, "As previously announced, I am pleased that our financial performance and healthy operating cash flow and balance sheet again allowed us to return funds to our shareholders through the $0.12 per share dividend and the repurchase of approximately 118,000 shares of stock."
Sales for the nine month period were up 4% versus the prior year period and increased approximately 5% on a metals adjusted basis. We estimate that MRO sales decreased 2%, while project sales increased 13%, on a metals adjusted basis.
Gross margin at 21.7% was down 50 basis points from the 2013 period. "Market competitiveness continues to pressure product pricing, however we have been successful in maintaining margins at consistent levels over the first nine months of the year," said Mr. Pokluda. Gross profit dollars increased $1.2 million or 1.9%, primarily due to the increase in sales.
Excluding the $7.6 million impairment from the 2013 amounts, operating expenses increased by 2.8% or $1.2 million in the current year period principally due to the investment in new distribution facilities, partially offset by expense reductions executed earlier in the year.
Interest expense of $0.9 million was higher than the prior year''s $0.8 million as average debt levels increased from $48.3 million in 2013 to $56.1 million in 2014, while interest rates increased 10 basis points to 2%. The effective tax rate for the period of 38.4% was higher than the 38.2% rate in the prior year period, as the prior year included a state tax credit.
Excluding the impairment from 2013 results, net income for the period of $11.3 million fell 1.2% from the $11.4 million level in the prior year period. However, diluted earnings per share of $0.64 were consistent with the prior year period.
The Company will host a conference call to discuss second quarter results today, Thursday, November 6, 2014, at 10:00 a.m. C.S.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 .
Approximately two hours after the completion of the live call, a telephone replay will be available until November 13, 2014.
Replay, Toll-Free #: 855-859-2056
Replay, Toll #: 404-537-3406
Conference ID # 24177300
With over 39 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 a low-smoke, zero-halogen cable, and related hardware, including , lifting products and .
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.
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.
CONTACT:
Nicol G. Graham
Chief Financial Officer
Direct: 713.609.2125
Fax: 713.609.2168
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Datum: 06.11.2014 - 06:30 Uhr
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